Rupee ended higher, Pound higher vs. Dollar

Tuesday,   10-Dec-2019   05:33 PM (IST)

The Indian rupee ended the session higher at 70.9175/9275 levels compared to its opening at 70.96/97 levels after touching the high of 70.8475/8575 levels driven by dollar selling by foreign banks and corporate and carry trade-related inflows. Rupee traded in the range of 70.8475-71.0450 levels today. Dollar inflows related to Brookfield Infrastructure Partners L.P.’s purchase of Reliance Industries’ tower assets, also aided the rupee, traders said. In July, Brookfield Infrastructure and its affiliates said they will invest $3.7 billion in telecom tower assets of Reliance Industries, as per media reports. Asian currencies closed mixed against the dollar, while most Asian equities were lower, as investors were cautious about a looming Dec. 15 deadline for imposition of U.S. tariffs on China. Indian government bonds fell for the third time in four sessions, amid lingering worries over fiscal slippage and on speculations that inflation rate may further accelerate. Profit-booking continued at the bourses as weak domestic and global economic scenario kept investors on the sidelines. The benchmark S&P BSE Sensex ended at 40,239.88 levels, down 247.55 points or 0.61 per cent. The Nifty50 closed below the 11,900-mark at 11,856.80 levels, down 81 points, or 0.68 per cent. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.61%, 3.46% and 3.97% respectively.

Sterling edged higher on Tuesday, cementing recent gains as traders shrugged off weak economic growth data and kept an eye on the final days of campaigning before Britain’s general election on Thursday. The pound on Monday reached a seven-month high against the dollar and a two-and-a-half-year high versus the euro as investor’s ramped ups their bets the governing Conservative Party would win a majority in Thursday’s election. Sterling held most of those gains even though data showed Britain’s economy grew at its slowest annual pace in nearly seven years in October, just 0.7%. Industrial output fell by 0.7% in the three months to October and services grew by 0.2%, its weakest increase since June, the data also showed. In early London trade, the pound was up 0.2% at $1.3157, close to Monday’s high of $1.3180. Against the euro the pound rose 0.1% to 84.18 pence, not far from the two-and-a-half-year high of 83.94 pence touched on Monday. Polls predict a Conservative Party majority, which many investors believe would lift some of the political uncertainty that has hampered the British currency. Prime Minister Boris Johnson’s Conservative Party has vowed to take Britain out of the European Union on Jan. 31.  The euro was little changed versus the dollar on Tuesday as investors were wary of a looming deadline for U.S. tariffs on China, the British election and upcoming Federal Reserve and European Central Bank meetings. The greenback was neutral against a basket of six other major currencies.