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Russian rouble weaker after PM Medvedev slams new U.S. sanctions

Kitco News

MOSCOW, Aug 3 (Reuters) - The Russian rouble weakened on Thursday after Prime Minister Dmitry Medvedev labelled new U.S. sanctions on Russia a "full-scale trade war", reflecting heightened tension between Washington and Moscow.

The rouble was also dragged lower by weaker oil prices, which dropped as a rally that has pushed up prices by almost 10 percent since early last week lost momentum. At 0722 GMT, the rouble was 0.2 percent weaker against the dollar at 60.71 and had lost 0.1 percent to trade at 71.87 versus the euro , adding to losses from the previous session.

U.S. President Donald Trump grudgingly signed the new sanctions, which target Russian energy projects and make it harder for Trump to ease earlier penalties on Moscow, into law on Wednesday after Congress approved them last week. Medvedev said late on Wednesday that the new sanctions meant an end to hopes for better U.S.-Russian ties, and the Russian foreign ministry said it reserved the right to impose counter-measures on the United States. Although analysts say the immediate impact of the new sanctions will not be major for the Russian economy, tensions between Moscow and Washington over their approval have hurt Russian assets.

The rouble is down over 2 percent against the dollar since the beginning of last week, despite the U.S. currency falling on global markets and oil prices rising over that period. The Russian currency has also been hurt by investors buying foreign currency after receiving rouble dividends.

Brent crude oil , a global benchmark for Russia's main export, was down 0.5 percent at $52.1 a barrel on Thursday.

Russian share indexes were slightly higher.

The dollar-denominated RTS index was up 0.2 percent to 1,023 points, while the rouble-based MICEX was 0.4 percent higher at 1,974 points.

For rouble poll data see reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/fx-polls?RIC=RUB=

For Russian equities guide see For Russian treasury bonds see Russia in graphics: (Reporting by Alexander Winning; Editing by Dmitry Solovyov)

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