Rupee ended lower, Yen higher vs. Dollar

Thursday,   23-Jan-2020   05:28 PM (IST)

The Indian rupee ended the session lower at 71.2650/2750 levels compared to its opening at 71.21/22 levels after touching the low of 71.34/35 levels as foreign banks stepped up dollar purchases due to weak regional risk appetite amid concerns over the spread of a new flu-like virus in China and beyond. Rupee traded in the range of 71.1750-71.34 levels today. Amid worries over the spread of the virus, the onshore Chinese yuan settled at two-week low while the offshore yuan traded 0.3% lower at 6.9300 to the dollar, and was set for a fourth day of losses. Death toll from the virus, which is believed to have originated in the city of Wuhan, climbed to 17 and more than 540 cases have now been confirmed. Indian government bonds ended higher, as cutoff price for the benchmark note at the central bank’s special open market operation was higher than expected and as crude oil prices slumped. The S&P BSE Sensex closed settled near day's high, up 271 points, or 0.66 per cent, at 41,386.40 levels. The Nifty50 was above the 12,150-mark and closed 73.45 points, or 0.61 per cent, higher at 12,180.40 marks. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.55%, 4.12% and 4.13% respectively.

The Japanese yen strengthened and China’s yuan fell to a two-week low on Thursday as investors grew more anxious about the spread of a virus in China, while the euro was calm ahead of the European Central Bank meeting. Elsewhere, Australia’s dollar rose half a percent after a surprise drop in the country’s unemployment rate. Deaths from the flu-like coronavirus stand at 17. Almost 600 people are infected and China has locked down Wuhan, a city of 11 million people, where the outbreak was believed to have originated at an animal market. The moves up in the safe-haven yen and down in the yuan were measured, suggesting investors were not yet panicking about the virus. EUR/USD is trading below 1.11, under pressure as fears of the coronavirus weigh on markets. The ECB is set to leave rates unchanged and provide views about the current economic environment. GBP/USD is trading above 1.31, consolidating its gains. The House of Lords gave its final seal to Brexit. Speculation ahead of the BOE's decision continues after upbeat data diminished chances for an imminent move. The pound bounced from a one-month low against the euro hit in the previous session on Thursday, as data this week reduced market expectations of a central bank rate cut as early as next week.