Rupee ended flat, Dollar rose vs. major currencies

Friday,   15-Jan-2021   04:13 PM (IST)

The Indian rupee ended the session flat at 73.07/08 levels compared to its opening at 73.0750/0850 levels amid rangebound moves on the dollar index and regional currencies following U.S. President-elect Joe Biden’s coronavirus relief package. Rupee traded in the range of 72.98-731625 levels. Asian currencies were largely mixed. Indian federal government bond yields stayed higher as the central bank did not announce any debt purchase plan for next week. The benchmark BSE Sensex and the broader NSE index ended lower, respectively, tracking broad losses in U.S. index futures and Asian equities. The benchmark S&P BSE Sensex closed at 49,035 levels, down 549.5 points or 1.11 per cent. The Nifty50 index slipped below the 14,500-mark and settled at 14,433 levels, down 162 points or 1.11 per cent lower. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.18%, 4.79% and 4.78% respectively.

The dollar rose and riskier currencies fell on Friday, as President-elect Joe Biden rolled out a $1.9 trillion stimulus plan that was offset by fresh U.S.-China tensions and a rise in COVID-19 infections in China. The dollar index is on track for its biggest weekly gain since November 2020, with its recent recovery from three-year lows challenging the narrative of dollar bearishness for 2021. Although the dollar's rebound slowed somewhat overnight after U.S. Federal Reserve Chair Jerome Powell said "now is not the time" to be talking about changing the Fed's asset purchases, it picked up again as European markets opened. It was on track for a weekly gain of around 0.4%, making this its strongest week since November 2020. President-elect Biden laid out his $1.9 trillion stimulus package proposal on Thursday, but analysts said that the market impact was limited by uncertainty as to how easily Democrats will be able to get their proposals through the Senate. The outgoing Trump administration ramped up tensions with China, imposing sanctions on Chinese officials and companies, including an investment ban on nine additional companies - moves China said it firmly opposes. COVID-19 infections also hurt risk appetite, as daily cases in China hit their highest in more than 10 months. will tighten its COVID-19 border controls and bring its curfew forward by two hours, while German Chancellor Angela Merkel said she wanted "very fast action" to counter the spread of COVID-19 mutations after Germany had a record number of deaths. Australian dollar - seen as a liquid proxy for risk - was down around 0.5% at 0.7738 versus the U.S. dollar. The New Zealand dollar was also down on the day, by around 0.6%. The dollar rose around 0.2% against China's offshore yuan, with the pair changing hands at 6.477. A vice governor at the People's Bank of China said on Friday that China's monetary policy would provide the necessary support for the country's economic recovery in 2021 and the central bank would keep the yuan stable.