Rupee ended lower, Euro higher vs. Dollar

Thursday,   29-Jun-2017   05:29 PM (IST)

The Indian rupee ended the session lower at 64.6275/6375 levels compared to its opening at 64.46/47 levels after touching the low of 64.64/65 levels as state-run stepped up greenback buys, outweighing broad dollar weakness amid bets European economies were likely to see a rise in interest rates going ahead. Most Asian currencies also fell against the dollar. Rupee today traded in the range of 64.4425-64.64 levels. The NSE Nifty rose 0.14 percent today its first gain in seven sessions, as value-buying boosted lenders such as Axis Bank, but trading was volatile because of the expiry of monthly derivative contracts at the end of the session. The broader Nifty rose 0.14 percent to 9,504.10. The benchmark BSE Sensex closed 0.08 percent higher at 30,857.52. Indian government bonds rose for the first time in five sessions, on likely buying from state-run banks ahead of the quarter end. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.54%, 4.59% and 4.52% respectively.

The euro jetted past $1.14 to its highest in just under 14 months on Thursday, with attempts by European Central Bank sources to moderate the message taken from a speech by President Mario Draghi this week falling on deaf ears. Three days of the biggest gains in more than a year for the single currency have pushed the broader dollar index to its lowest since October and prompted some of the market's biggest dollar supporters to call the currency's rally over. Draghi's speech on Tuesday - coming amid a raft of hawkish signals from other major global central banks - convinced markets the ECB was preparing to start withdrawing its own emergency stimulus for the euro zone economy later this year. After a long run lower, that has put the euro back in relatively uncharted territory, with some analysts arguing there is little technical resistance beneath $1.20. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, hit a trough of 95.57, the weakest since October. Federal Reserve Chair Janet Yellen reiterated earlier this week that the bank would continue to gradually raise interest rates after it hiked rates this month, but the subdued inflation outlook in the U.S. has raised doubts over whether the Fed will be able to stick to its planned tightening path. A summary of the Bank of Japan’s latest meeting published on Monday showed that policymakers favor sticking to ultra-loose monetary policy, with inflation still well below the banks 2% target. The divergent monetary policy outlook between the Fed and the BoJ has helped support the dollar against the yen. Meanwhile, sterling briefly rose above the $1.30 level after the Bank of England’s Chief Economist Andy Haldane reiterated that interest rates may have to “edge up” if the cost of living continues to rise in the UK. The comments came a day after BoE Governor Mark Carney warned that the continued growth in the UK economy would eventually lead to higher interest rates.