Rupee ended flat, Euro off highs vs. Dollar
Monday,
20-Aug-2018
05:24 PM (IST)
The Indian rupee ended the session almost flat at 69.82/83 levels compared to its opening at 69.83/84 levels. Rupee rebounded from last week’s record low to move up to touch the high of 69.60/61 levels today as risk appetite was buoyed by optimism ahead of trade talks between the U.S. and China likely this week. Bunched-up dollar inflows after a long weekend also added to gains in the rupee. Rupee traded in the range of 69.60-69.87 levels today. Most Asian currencies also ended higher, including the Chinese Yuan, advancing for third consecutive session. Indian shares rose today to record closing levels, driven by Larsen & Toubro on a buyback proposal, while Infosys Ltd declined following the resignation of its chief financial officer. The benchmark BSE Sensex closed 0.87 percent higher at 38,278.75, while the broader NSE Nifty ended up 0.71 percent at 11,551.75. Indian government bonds ended higher today, as the rupee strengthened against the U.S. dollar amid hopes that trade tensions between the U.S. and China may ease. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.67%, 4.29% and 4.22% respectively.
The EUR/USD trades above 1.1400 but below the highs. Markets are also concerned by Italy's potential budget spending. The US Dollar is recovering after falling on Friday on hopes for US-Chinese progress on trade. The world's two largest economies, the US and China are working on a potential resolution to the trade dispute that has got markets concerned. There are reports of aiming to reach an accord by November. The Italian government wants to spend some €80 billion on infrastructure following the Genova bridge disaster. The move would breach EU budgetary rules. The GBP/USD is trading around 1.2760, balanced on the day. The US Dollar is recovering from the fall on Friday related to US-Chinese talks. Concerns about a no-deal Brexit weigh on Sterling. The figures released last week in the UK were mixed. Retail sales beat expectations but wages slightly disappointed and inflation is on the rise. The focus now shifts to Brexit talks. Concerns about a no-deal Brexit have been weighing on Sterling for some time. The Turkish lira weakened on Monday after the country’s credit rating was cut further into junk territory on Friday and following reports of shots being fired at the U.S. embassy in Ankara. Both Standard & Poor’s and Moody’s downgraded Turkey’s sovereign credit rating on Friday amid a currency crisis in the country. S&P cited “extreme lira volatility” while Moody’s warned of “further weakening of Turkey’s public institutions and the related reduction in the predictability of Turkish policymaking.”
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