Rupee ended higher, Pound rose vs. Dollar

Thursday,   25-Apr-2024   04:15 PM (IST)

The Indian rupee ended the session higher at 83.3150/3250 levels compared to its opening at 83.3350/3450 levels. Rupee traded in the range of 83.3150-83.3975 level today. Rupee wedged between a decline in most of its Asian peers and interbank dollar sales after rupee managed to hold above a key support level. Asian currencies slipped, pressured by an uptick in U.S. bond yields. Meanwhile, dollar-rupee forward premiums inched higher, with the 1-year implied yield up 2 basis points at 1.70%. Indian government bond yields were up as traders eye supply and U.S. data. Equity benchmark indices snubbed weak cues from global peers, and staged a smart recovery in today's trading session to end on firm note. The Sensex eventually ended the day with a gain of 486.50 points at 74,339.44. The NSE Nifty finally settled 167.95 points higher at 22,570.35. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 1.15%, 1.26% and 1.39% respectively.

Sterling rose versus the dollar and the euro as investors assessed the Bank of England's monetary policy path after recent mixed signals from policymakers. The pound dropped late last week and on Monday versus the greenback as Governor Andrew Bailey said that inflation was broadly declining in line with BoE forecasts, which would indicate that interest rates might fall more quickly than the market currently expects. On Tuesday, it jumped against the dollar after a softer reading of monthly U.S. business activity battered the dollar. BoE Chief Economist Huw Pill said on Tuesday that rate cuts remained some way off, even if the passage of time and an absence of bad news on inflation had brought them closer. Some analysts argued that recent British economic data would suggest a later rather than earlier start of the BoE monetary easing cycle. Sterling was up 0.4% at $1.2519, having risen 0.8% on Tuesday, the most in one day since mid-December. It dropped around 1.5% from Thursday to Monday. The pound's decline against the euro resulted from the dovish comments from BoE officials, which were further compounded by solid economic data in the euro area. This included euro zone business activity expanding at its fastest pace in April of nearly a year, and Germany's private sector unexpectedly returned to growth. Sterling recouped some losses in the last two sessions, with the euro at 85.64 pence per pound after hitting on Monday 86.44, its highest level since early January. UBS maintained its 85-87 range view for the euro against the pound, with a target at 85 for the end of the second quarter.