Rupee ended lower, Dollar little change vs. major currencies

Thursday,   22-Jun-2017   05:27 PM (IST)

The Indian rupee ended the session lower at 64.5875/5975 levels compared to its opening at 64.53/54 levels after touching the low of 64.5975/6075 levels weighed down by last-minute greenback purchases by state-run banks amid thin trade volumes and lack of cues. Intraday, suspected dollar purchases by the central bank offset gains prompted by likely custodian dollar sales, also keeping the currency in a tight band. Rupee rose to an intraday high of 64.45/46 levels, before paring some gains on dollar purchases. The BSE Sensex ended flat after earlier rising as much as 0.8 percent to a record high as IT firms reversed earlier gains after a lobby group issued a muted revenue guidance for exports, while energy firms fell on sliding oil prices. The benchmark BSE index closed up 0.02 percent at 31,290.74, after earlier hitting a record high of 31,522.87. The broader NSE Nifty was down 0.04 percent at 9,630.00. Indian government bonds fell for the first time in four sessions, after the latest policy meeting minutes showed the central bank governor favors avoiding premature policy action amid an uncertain near-term inflation outlook. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.71%, 4.67% and 4.56% respectively.

The dollar was little changed against the other major currencies on Thursday, as markets showed no reaction to the previous session’s upbeat U.S. housing sector data and turned their attention to the upcoming report on weekly jobless claims. The greenback showed no reaction to Wednesday’s report by the U.S. National Association of Realtors saying that existing home sales increased by 1.1% in May to 5.62 million units, confounding expectations for a 0.5% drop. The Reserve Bank of New Zealand earlier held the benchmark interest rate at 1.75%, in a widely expected move, and indicated that it has no plans to hike rates anytime soon. “Monetary policy will remain accommodative for a considerable period,” RBNZ Governor Graeme Wheeler said in a statement. Wheeler added that “a lower New Zealand dollar would help rebalance the growth outlook towards the tradable sector,” but also noted the currency’s recent gains were partly driven by higher export prices.