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Rupee ended lower, Euro lower vs. Dollar

Tuesday,   31-Mar-2020   05:44 PM (IST)

The Indian rupee ended the session lower at 75.66/67 levels compared to its opening at 75.52/53 levels after touching the low of 75.6750/6850 levels on dollar bids by foreign banks. Rupee touched the high of 75.3050/3150 levels as regional risk aversion eased on better-than-expected manufacturing data from China and as local equities extended gains. Month end dollar sales by exporters and foreign banks also aided rupee. India’s fiscal deficit in the first 11 months of the current financial year that ends today totalled 10.36 trillion rupees, widening from 8.51 trillion rupees in the comparable year-earlier period, government data showed today. Fiscal deficit for April-February was 135.2% of the government’s estimate for this financial year. The S&P BSE Sensex gained 1,028 points or 3.62 per cent to settle at 29,468.49 on the last day of the financial year 2019-20 (FY20). NSE's Nifty ended at 8,598, up 317 points or 3.82 per cent. Indian government bonds posted their best gains in 17 financial years, as the central bank delivered its deepest rate cut in eleven fiscals to push a slowing economy, while the use of unconventional policy tools by the central bank and the government's plans to allow more investments in sovereign papers further aided the rise. India’s infrastructure output rose 5.5% on year in February under a re-based time series, the fastest pace of growth since Mach last year and quickening for a third month, as output of petroleum refinery products and electricity jumped. The infrastructure output print for January was revised to 1.4% from previously reported 2.2% expansion. Indian Inter-bank forex markets would be closed tomorrow and on 2nd April on account of Yearly closing and Ram Navami.

EUR/USD is on the back foot, trading around 1.10 amid a mixed market mood on the last day of a volatile quarter. Eurozone inflation figures, US consumer confidence, and coronavirus headlines are eyed. Eurozone inflation fell to 0.7% yearly in March. GBP/USD is trading above 1.23 in volatile end-of-quarter trading. UK GDP was confirmed at 0% in Q4 2019 while the current account deficit is narrower than expected. Coronavirus statistics are awaited. Concerned by the number of growing COVID-19 cases in the United States, where the reported cases are nearly double those in China, investors bought the dollar against sterling and other major currencies considered riskier than the U.S. currency. Pound was weaker against the euro as well, trading down 0.1% at 88.99 pence. The pressure on sterling came also from the fact that confidence among British companies slumped in the second week of March as the coronavirus crisis gathered pace, but before the government shut much of the economy to slow its spread, according to a survey published on Tuesday. In addition, the ratings agency Fitch cut Britain’s sovereign debt rating last week, saying the country’s debt would surge as the government ramped up spending to offset the near shutdown of the economy in the face of the virus. Leveraged funds have cut their net long positions on the pound in the week to March 24, according to the latest CFTC data. Sterling remained vulnerable, analysts said, as Britain’s current account deficit and large external balance sheet put it in a weaker position compared with other countries in the face of the global slowdown caused by the coronavirus.