Rupee ended lower, Dollar holding gains vs. major currencies

Tuesday,   17-Oct-2017   05:22 PM (IST)

The Indian rupee ended the session lower at 65.02/03 levels compared to its opening at 64.79/80 levels after touching the low of 65.0350/0450 levels as reports U.S. President Donald Trump may choose a hawkish John Taylor to lead the Federal Reserve pushed U.S. Treasury yields higher, lifting the greenback. Most other Asian currencies were also trading lower against the greenback.  The Nifty ended little changed today after hitting a third consecutive high earlier in the day, as investors turned cautious ahead of key corporate results. The Nifty closed up 0.04 percent at a record closing high of 10,234.45. The benchmark Sensex snapped a three-day rally to end down 0.08 percent at 32,609.16. Indian government bonds fell, with the benchmark note ending at an over one-week low, as traders cut positions ahead of holidays later this week, while news of shortfall in tax revenues further weighed on sentiment. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.43%, 4.21% and 4.27% respectively.

The U.S. dollar held onto gains against other major counterparts on Tuesday, as speculation over who will replace Janet Yellen at the head of the Federal Reserve lent support to the greenback. The greenback was boosted by reports on Monday that U.S. President Donald Trump was favoring Stanford economist John Taylor to replace Federal Reserve Chair Janet Yellen next year. Taylor is seen as more hawkish than current Yellen. The U.S. dollar was also supported after Fed Chair Yellen said Sunday that the economy remains strong and the strength of the labor market calls for continued gradual increases in interest rates despite soft inflation. EUR/USD slipped to 1.1753 after data showed that German economic sentiment rose much less than expected in October. Elsewhere, the pound steady at 1.3234 after data showed that U.K. inflation hit a five-and-a-half year high in September. Statistics New Zealand reported on Tuesday that consumer prices increased 0.5% in the third quarter, beating expectations for a 0.4% gain. Year-over-year, consumer prices rose 1.9% in the three months to September, compared to expectations for a 1.8% gain. At the same times, the minutes of the Reserve Bank of Australia's October policy meeting showed that policymakers are in no hurry to raise interest rates.