Rouble sell-off slows, US dollar resumes rise as Ukraine crisis buffets trade

TOKYO (REUTERS) - The rouble tried to regain some stability on Tuesday (March 1) after its crash to an all-time low, while the United States dollar resumed its rise against major peers as traders paused for breath amid the fast-moving Ukraine crisis.

A modicum of calm has returned to currency markets since officials from Russia and Ukraine held an initial round of ceasefire talks overnight, four days after Russia invaded its neighbour, allowing some of the big moves from the start of the week to retrace after many positions were cleared out, said Mr Shinichiro Kadota, senior FX strategist at Barclays in Tokyo.

"People are just watching the headlines, but we're at a point where unless there's some obvious negative news, the market is trying to stabilise a little," said Mr Kadota

The safe haven yen and Swiss franc pulled back after their biggest rallies in almost seven weeks against the dollar on Monday.

The dollar added 0.16 per cent to 115.145 yen, after registering a 0.47 per cent slide overnight. It rose 0.20 per cent to 0.9185 franc, following Monday's 0.95 per cent retreat.

The euro resumed its decline, dropping 0.25 per cent to US$1.1191, but well off the low of US$1.1121 from the previous session.

The risk-sensitive Australian dollar slipped 0.15 per cent to 72.525 US cents after earlier touching a nearly one-week high of 72.67 cents.

The Singapore currency was barely changed against the US dollar, after easing 0.4 per cent on Monday. The Singdollar was trading at 1.3555 per US dollar at around 1.15pm local time.

Leading cryptocurrency Bitcoin edged back toward US$43,000 after leaping to a nearly two-week high above US$44,000 late overnight.

The rouble started the week in dramatic circumstance, plunging as much as 30 per cent to a record 120 per dollar after Western countries and their allies slapped Russia with new sanctions including cutting off some banks from the Swift financial network.

The currency recovered somewhat after an emergency rate hike and other urgent measures adopted by the Russian central bank, and last traded flat at 101.

"News from Ukraine remain bleak," senior foreign exchange strategist Rodrigo Catril, from National Australia Bank, wrote in a note. "Fighting rages on as the West looks to increase efforts to isolate Russia."

The instability will keep safe-haven currencies, including the dollar and the euro, under pressure, Mr Catril said.

The dollar index, which measures the greenback against six major rivals, rose 0.15 per cent to 96.885, but well back from Monday's high at 97.438.

The Ukraine crisis has seen traders pare bets for a 50 basis-point rate hike on March 16, with current odds at 11.4 per cent, according to CME's Fedwatch tool.

Atlanta Fed president Raphael Bostic said on Monday that he is not ruling out a half point move, although he favours a quarter point increase, in the first comments by a Fed official since the conflict.