Rupee ended higher, Pound higher vs. Dollar
Monday,
09-Dec-2019
05:23 PM (IST)
The Indian rupee ended the session higher at 71.0350/0450 levels compared to its opening at 71.29/30 levels after touching the high of 71.0150/0250 levels aided by likely corporate greenback inflows that outweighed the impact of a robust U.S. jobs report. Rupee traded in the range of 71.0150-71.30 levels today. Traders suspect the dollar inflows were related to REC’s dollar-bond issue. The company plans to raise $500 million through five-year bonds, and has finalized the coupon on the same last week, according to media reports. Most Asian currencies settled lower against the greenback after the dollar index rose by the most in a month on Dec. 6, while the 10-year U.S. Treasury yield climbed to 1.86% following a better-than-expected U.S. jobs report. Finance Minister Nirmala Sitharaman said over the weekend that the government is working on more steps to revive the sagging economy. These include a rationalisation of personal income tax rates, she said, according to media reports. Indian government bonds ended largely steady after two consecutive days of losses, as lingering fears of a fiscal slippage offset the impact of some value buying. Equity markets ended a volatile trading session in the positive territory today supported by buying in blue-chip stocks. The benchmark S&P BSE Sensex settled 42.28 points, or 0.1 per cent, higher at 40,487.43 levels. On the NSE, the Nifty50 settled at 11,937.50-mark, up 16 points, or 0.13 per cent. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.27%, 3.36% and 3.88% respectively.
The British pound hit 31-month highs against the euro on Monday and hit seven-month highs against the U.S. dollar amid growing confidence about a Conservative Party victory in Thursday’s U.K. elections, which would end political paralysis on Brexit. The pound was boosted as fears over the prospect of a hung parliament receded after an opinion poll on Monday showed that the Conservative Party extended its lead over the Labor Party to 14 percentage points, up from 9 percentage points a week ago. Demand for the dollar was underpinned on Monday after Friday’s blockbuster jobs report, but the currency struggled to make headway amid worries about an escalation in the U.S.-China trade war. U.S. nonfarm payrolls increased by 266,000 jobs last month, the biggest gain in 10 months, while the unemployment rate ticked back down to 3.5%, its lowest level in nearly half a century. Those figures suggested the Trump administration's 17-month trade war with China, which has plunged manufacturing into recession, has not yet spilled over to the broader U.S. economy. Still, investors think that could change if trade tensions escalate further, especially if Trump goes ahead with planned tariffs on some $156 billion worth of products from China from Dec. 15. The market has been largely working on the assumption that those tariffs, which cover several consumer products such as cellphones and toys, will be dropped or at least postponed, given that Washington and Beijing agreed in October to work on a trade deal. Top White House economic adviser Larry Kudlow confirmed on Friday that the Dec. 15 deadline to impose the new tariffs remains in place, but added that Trump likes where trade talks with China are going. China's exports shrank for the fourth consecutive month in November, underscoring persistent pressures on manufacturers from the Sino-U.S. trade war.
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