Rupee ended higher, Pound higher vs. Dollar

Monday,   21-Jun-2021   04:15 PM (IST)

The Indian rupee ended the session higher at 74.10/11 levels compared to its opening at 74.2450/2550 levels after touching the high of 74.08/09 levels on exporters’ dollar sales. Rupee opened lower today and touched the low of 74.2750/2850 levels in early deals  on broad dollar strength and worries of foreign fund outflows, as comments by a Federal Reserve official reinforced the hawkish rate outlook projected by the U.S. central bank last week. Rupee traded in the range of 74.08-74.2750 levels today. Most regional currencies slumped today following the dollar’s strength against a basket of six major currencies Indian federal government bond yields rose marginally as the minutes of the Monetary Policy Committee’s June meeting highlighted inflation risks. Domestic equity market ended higher today, reversing the steep losses logged in the morning, amid board-based buying. The S&P BSE Sensex index closed at 52,574 levels, up 230 points or 0.44 per cent. The Nifty50 index ended at 15,746 levels, up 63 points or 0.4 per cent. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.91%, 3.99% and 4.14% respectively.

Sterling edged higher on Monday after falling overnight to its lowest level since April as the currency remained vulnerable since the U.S. Federal Reserve surprised the market with a hawkish tone last week. The pound dropped below $1.38 against the dollar overnight, and was close to levels touched last week when the Fed signalled it would raise interest rates and end emergency bond-buying sooner than expected. The pound re-emerged versus a weakening dollar to rise to $1.3878, after falling to its lowest of $1.3786 since April 16. Versus the euro, it was flat at 85.91 pence, after closing on Friday after its worst week against the single currency since April. Traders are also weighing up whether the Bank of England will hike rates in 2022, ahead of the Fed. The BoE next meets on Thursday. Currency markets are fully pricing in a 30 basis point hike in rates by the BoE by December 2022. Investors are also watching a dispute between Britain and the European Union over post-Brexit trade in the British province of Northern Ireland. In the meantime, asking prices for British homes between mid-May and early June had their biggest rise for the time of year since 2015, property website Rightmove said.