Rupee ended higher, Pound lower vs. Dollar

Wednesday,   20-Jun-2018   05:23 PM (IST)

The Indian rupee ended the session higher at 68.07/08 levels compared to its opening at 68.10/11 levels after touching the high of 68.04/05 levels tracking a rebound in regional and local shares from a recent sell-off sparked by concerns of a trade war between the U.S. and China. There was some talk that dollar sales by a handful of private and state-run lenders may have been on behalf of the central bank. However, the same could not be confirmed. Most Asian currencies also recouped most of their losses and ended mixed.  Rupee traded in the range of 68.04-68.1750 levels today. Indian shares ended higher today despite lingering trade tensions between the United States and China that roiled markets in previous sessions, with index heavyweight Reliance Industries Ltd and financial stocks leading the gainers. The broader NSE index closed up 0.58 percent at 10,772.05, while the benchmark BSE index ended 0.74 percent higher at 35,547.33. Indian government bonds rose for the fourth consecutive session as the central bank offered to buy notes to inject liquidity in the banking system. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.24%, 4.16% and 4.22% respectively.

The pound was trading close to seven month lows on Wednesday as Prime Minister Theresa May’s government faced another crunch vote on Brexit. The House of Commons was to vote on the EU withdrawal bill, the government’s flagship piece of Brexit legislation, later in the day. The government is seeking to defeat an attempt to give MPs a “meaningful vote” before Britain could leave the EU without a deal. The vote is coming at a time of growing investor nervousness that Brexit negotiations could fail to reach an agreement. Market sentiment remained cautious as concerns over a heated trade spat between the U.S. and China lingered on. Fears over trade tensions mounted on Tuesday after Beijing warned that it would retaliate swiftly after U.S. President Donald Trump threatened to impose a 10% tariff on $200 billion of Chinese imports. The moves exacerbated worries among investors that the world’s two largest economies could descend into an all-out trade war. Uncertainty over the future of the North American Free Trade Agreement and concerns over tariffs that the Trump administration has imposed on European trading partners also added to investor nerves. The Japanese currency is often sought by investors as a safe haven in times of geopolitical tensions and market turmoil.