MOSCOW (Reuters) - The rouble pared gains on Friday, falling back past 76 to the dollar after a Russian-backed separatist leader in eastern Ukraine announced the evacuation of the breakaway region's residents to southeast Russia after a rise in shelling.
Russia has repeatedly rejected western assertions that it may be planning to invade neighbouring Ukraine, but its assets have been hammered by fears of a military conflict that would almost certainly trigger sweeping new Western sanctions against Moscow.
By 1345 GMT, the rouble was 0.1% stronger against the dollar at 76.17, slipping sharply from a session-high of 75.63, after Denis Pushilin, head of the self-proclaimed Donetsk People's Republic, said Russia had agreed to provide accommodation for those who leave.
Against the euro, the rouble had gained 0.1% to 86.47.
The Russian currency had traded at 74.26 against the greenback before the latest sell-off started a week ago.
"The week ends as it began, awash in uncertainty on the geopolitical and economic fronts, suggesting caution and some bargain-hunting will be at play," BCS Global markets said.
Russian markets took a hit on Thursday when U.S. President Joe Biden said that there was every indication that Russia planned to invade Ukraine in the next few days and was preparing a pretext to justify it.
Hopes of a diplomatic solution remain as U.S. Secretary of State Antony Blinken agreed to meet Russian Foreign Minister Sergei Lavrov late next week, provided Russia does not invade Ukraine.
On Friday, pro-Russia rebels in Ukraine accused government forces of shelling a village, while Russian media reported more infantry and tank units were returning to their bases despite the Western warnings of an imminent invasion.
The market was watching a meeting between President Vladimir Putin and his Belarusian counterpart Alexander Lukashenko as the two countries, both sharing borders with Ukraine, hold joint military drills.
Tension related to Ukraine helped oil prices climb to their highest levels since 2014 this week, which should have a positive impact on Russia's budget and stocks.
Brent crude oil, a global benchmark for Russia's main export, was down 1.8% at $91.36 a barrel, moving away from its recent peak of $96.78. The last time oil prices were that high, the rouble traded at around 40 to the dollar and 50 against the euro.
The dollar-denominated RTS index fell 2.4% to 1,415.0 points. The rouble-based MOEX Russian index was 2.7% lower at 3,417.3 points.