Rupee ended almost flat, Dollar moderately lower vs. major currencies

Tuesday,   12-Dec-2017   05:23 PM (IST)

The Indian rupee ended the session almost flat at 64.40/41 levels compared to its opening at 64.41/42 levels. Rupee fell to 64.5275/5375 levels early today as global crude oil prices jumped to an over two-year high, damping demand for domestic assets. Investors were cautious also ahead of a near-certain rate increase by the U.S. Federal Reserve at the conclusion of a two-day meeting tomorrow. However, rupee recouped some losses by the day end to touch the high of 64.3950/4050 levels on exporters' dollar sales. Most other Asian currencies were flat to lower against the dollar. Indian shares fell today snapping three straight sessions of gains, as oil marketers slid after Brent crude jumped to over two-year highs, and as banking stocks declined following three consecutive sessions of rises. The broader NSE Nifty ended 0.8 percent lower at 10,240.15, while the benchmark BSE Sensex closed down 0.68 percent at 33,227.99. Indian government bonds fell for a fourth session, with the benchmark note plunging to a new low, as higher crude oil prices and concerns about inflation sparked a selloff. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.69%, 3.85% and 4.30% respectively.

The dollar remained moderately lower against other major currencies on Tuesday, as investors were focused on the Federal Reserve's upcoming policy meeting, scheduled to begin later in the day. The Fed is widely expected to raise interest rates at its two-day policy meeting that will end on Wednesday and is currently seen tightening two to three times next year, but concerns over tepid inflation could alter the outlook for 2018. The Bank of England and the European Central Bank will also meet this week and are expected to hold rates steady. Data earlier showed that German economic sentiment fell unexpectedly in December, while another report showed that UK consumer price inflation hit a fresh five-year high in last month. The kiwi was boosted by the appointment of Adrian Orr, a former central bank official, to head the Reserve Bank of New Zealand as of March 2018.