UPDATE 1-Rouble bruised by weaker oil, profit-taking

MOSCOW, Nov 12 (Reuters) - The rouble weakened on Friday, bruised by a correction in oil prices and by profit taking as emerging market assets suffered on renewed risk aversion due to concerns over the debt-laden euro zone periphery. "The rouble showed an appropriate correction after several days of optimistic firming", said Pyotr Neymishev, a dealer at Otkritie bank. Against a broadly firmer dollar, the rouble slid 0.55 percent to 30.75.

Versus the euro it gave up 0.84 percent to 42.28, stepping away from an one-month low of 41.8, hit earlier in the session. Versus the euro-dollar basket, used by the central bank to monitor exchange rates policy, the rouble weakened 0.72 percent to 35.94. Crude prices were down 1.8 percent on Friday to below $87 a barrel as investors rushed to unwind commodity positions. Dealers said market players were also seeking to lock in profits in long rouble positions ahead of the weekend. "There were mainly speculative buyers of foreign currencies as players were covering positions," said Roman Pakhomenko, chief dealer at Lanta bank. A further slide in the rouble looks unlikely at present as still relatively high crude prices ensure inflows of foreign currency into Russia's export-focused economy. Any further weakness in the rouble will be also contained by central bank currency sales. The bank sells few hundred million dollars a day to ease downside pressure on the domestic currency, dealers say. Market players say the rouble should firm later in the month as Russian exporters step up conversion of dollar and euro revenues to meet domestic tax liabilities. "It is worth keeping short positions in the basket (long rouble positions), given strong oil and forthcoming tax payments," said Pakhomenko at Lanta bank. Russia's trade balance retains a substantial surplus despite growing imports, supporting upside for the rouble, but any rally up to the end of 2010 may be checked by local banks and companies buying dollars and euros to redeem foreign debts. According to central bank data, Russian companies and banks must redeem $35.6 billion in foreign currency debt in the fourth quarter alone. A slowdown in the economic recovery may also keep investors wary of raising exposure towards Russia. On Friday preliminary data showed growth in gross domestic product (GDP) almost halved in the third quarter compared with the second due to a fall in output as a result of a severe summer drought. (Reporting by Andrey Ostroukh, Vladimir Abramov and Lidia Kelly; Writing by Andrey Ostroukh; editing by John Stonestreet) Keywords: RUSSIA ROUBLE/ (andrey.ostroukh@reuters.com, +7 495 775 12 42) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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