Rupee ended lower, Swiss franc falls vs. Dollar
Wednesday,
22-Jan-2020
05:29 PM (IST)
The Indian rupee ended the session lower at 71.1950/2050 levels compared to its opening 71.13/14 levels after touching the low of 71.24/25 levels as regional cues remained muted in the wake of a virus outbreak in China. Rupee traded in the range of 71.14-71.24 levels today. The onshore Yuan settled marginally higher while the offshore was little changed at 6.8950 per dollar. The Chinese unit has been battered lately due to the recent virus outbreak in China and other countries. The Yuan staged a mild recovery today following a press conference by Chinese officials. Most other Asian currencies traded flat-to-higher against the dollar. Broad market focus turned towards the European Central Bank’s monetary policy decision, due tomorrow. The S&P BSE Sensex ended a volatile trading session at 41,115.38 levels, down 208.43 points or 0.50 per cent. The Nifty50 settled just above the 12,100-mark at 12,106.90 levels, down 62.95 points or 0.52 per cent. Indian government bonds ended largely unchanged, as investors awaited tomorrow's special open market operation and the federal budget next week. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.61%, 3.99% and 4.06% respectively.
The Swiss franc fell on Wednesday on signs the central bank may be intervening to stop it rising further, outweighing the impact of concerns about the spread of a new coronavirus that have driven investors into safe-haven assets this week. The franc dropped against both the dollar and euro, falling as much as 0.5% against the single currency. Against the euro, the franc fell to 1.0787 francs per euro before trimming some gains to around 1.0767 francs. It hit a more than 2-1/2-year low of 1.0729 last week. Against the dollar, it was down 0.2% at $0.97055. Broader currency markets were trapped in tiny ranges, with concerns that the coronavirus outbreak in China could trigger a pandemic leading to some demand for safe-haven assets. The Swiss National Bank has had an interventionist approach to the franc as it struggles to boost inflation in the highly export-oriented economy. It declines to talk about its currency management policy, but investors use weekly sight deposit data as a proxy to estimate how active it has been in the currency markets. Data published on Monday showed an increase in the amount of cash that domestic commercial banks hold with the Swiss National Bank. Though there was no immediate market trigger for the central bank to intervene around these levels, traders said a drop in general market volatility may have encouraged authorities to step in as it usually creates an outsized impact on the market. Meanwhile, the euro remained pinned at a one-month low amid expectations European Central Bank would strike a cautious tone at its meeting on Thursday. A survey by Germany’s ZEW research institute on Monday showed investors’ mood improved more than expected in January and the signing of a Phase 1 China-U.S. trade pact raised hopes Europe’s economy would recover. A Citigroup index of euro zone economic activity rose to its highest since February 2018. But improvement in the business surveys is not yet evident in actual economic activity, which remained weak at the end of 2019.
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