Rupee ended higher, Euro steady vs. Dollar

Friday,   06-Dec-2019   05:32 PM (IST)

The Indian rupee ended the session higher at intraday high of 71.19/20 levels compared to its opening at 71.26/27 levels due to positive Asian cues and weakness in dollar index. Strong corporate inflows and positive developments in the U.S.-China trade talks also aided rupee. Rupee briefly declined to 71.4350/4450 levels today amid a sell-off in local shares and on dollar purchases by state-run banks. Rupee traded in the range of 71.19-71.4350 levels today. On the trade talks front, U.S. President Donald Trump reportedly said yesterday that talks were “moving right along” after Chinese officials reiterated Beijing’s position that tariffs should be rolled back as part of an interim trade deal. Trump earlier in the week had hurt expectations of a deal by saying he had no deadline to make one, and that it could come after the 2020 U.S. presidential election. Asian currencies closed higher, while equities in the region advanced following a positive session on Wall Street overnight. Indian government bonds tumbled this week, with the benchmark yield positing its biggest weekly rise in 20 months, after the country's Monetary Policy Committee yesterday maintained status quo on policy rates citing inflation risks, heightening the uncertainty over future easing. The benchmark S&P BSE Sensex closed 334 points, or 0.82 per cent, lower at 40,445.15 levels. The Nifty50 slipped below the 11,900-mark in the intra-day trade to hit a low of 11,888.85. At close, the index was at 11,921.5 levels, down 97 points, or 0.81 per cent. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.30%, 3.43% and 3.91% respectively.

The euro was steady on Friday against the dollar, which was headed for its worst week since mid-October by concern over U.S.-China trade relations and hints of weakness in the U.S. economy. New Zealand’s kiwi rebounded amid renewed risk appetite and encouraging domestic factors. Against a basket of six currencies, the dollar fell to a one-month low of 97.355, but was last flat at 97.424. The euro was little changed at $1.1102. Sterling was 0.2% weaker at $1.3129 and down 0.1% against the euro at 84.49 pence, but close to a two-and-a-half-year high as traders grew more confident uncertainty over Brexit would end soon. U.S. President Donald Trump said U.S.-China trade talks were “moving right along” and that “we’ll have to see” about an increase in tariffs due next week. But markets were unconvinced, with worries stemming from a lack of similar enthusiasm from China, keeping the dollar subdued. Chinese officials reiterated that some U.S. tariffs must be rolled back for a deal to end the 17-month trade war, something Washington has given no sign of doing. Risk sentiment recovered, pushing the New Zealand dollar to a four-month high of 0.6569 against the U.S. dollar. U.S. non-farm payrolls data due at 1330 GMT comes after dismal numbers showed weak private payrolls, soft services activity and a shrinking manufacturing sector.