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Rupee ended lower, Pound rose vs. Dollar

Monday,   28-Sep-2020   02:55 PM (IST)

The Indian rupee ended the session lower at 73.7750/7850 levels compared to its opening at 73.64/65 levels after touching the low of 73.86/87 levels on dollar buying by a few state-run banks, likely on behalf of the central bank, amid expectations of more investment flows in the coming sessions. Rupee traded in the range of 73.53-73.86 levels today. India's federal government bond yields ended higher, with the benchmark yield at a four-week high, as traders cut positions after devolvement at a primary debt auction on Friday, while they awaited the second-half borrowing calendar due this week. Media reports stated over the weekend that Reliance Industries received 75 billion rupees from Silver Lake for a 1.75% stake sale in Reliance Retail. Moreover, flows from the initial public offering of Mazagaon Dock and UTI AMC will open for subscription tomorrow, and are expected to garner foreign inflows, traders said. Equity markets were holding on to their gains and trading 1.4 per cent higher. At 2:08 pm, the S&P BSE Sensex was trading at 37,978, up 589 point, while the broader Nifty50 was at 11,226 up 175 point. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.58%, 3.73% and 3.82% respectively.

The British pound rose to a 19-day high versus the euro and gained 0.7% against the U.S. dollar on Monday on hopes that Britain could secure a Brexit trade deal with the European Union by October or at least avoid a cliff-edge exit from the bloc. A final agreement must be reached by the end of December but both sides have set a preliminary deadline for next month as it would take some time to sign off any deal. The Bank of England and the European Union’s securities watchdog said on Monday they have agreed on the information-sharing arrangements needed for the bloc’s banks to continue using clearing houses in London from January. The internal market bill had raised worries that Britain was on course to override the withdrawal agreement signed last year which protected the border between Ireland and Northern Ireland, an issue at the heart of last year’s Brexit negotiations. Still, Britain on Friday said there was still a lot of work to do in talks with the EU on a trade deal and called on the EU to translate a “more constructive attitude” into realistic policy positions. Sterling was 0.6% higher against the euro at 90.70 pence by 0840 GMT, its highest since Sept. 9. Against the dollar it was at its highest since Sept. 22 at $1.2843. Britain continues to struggle with a rise in coronavirus infections, recording 5,693 new cases on Sunday. The British government is mulling tougher restrictions in England to tackle the swiftly accelerating second wave of the novel coronavirus outbreak. A coronavirus-induced economic recession in the UK has market watchers questioning whether Britain will cut its interest rate below zero. The Bank of England’s investigation into whether negative rates might help the British economy through its current downturn has found “encouraging” evidence, policymaker Silvana Tenreyro said in an interview published late on Saturday.