Rupee ended higher, GBPUSD recovers

Friday,   23-Mar-2018   05:27 PM (IST)

The Indian rupee ended the session higher at 65.0050/0150 levels compared to its opening at 65.18/19 levels after touching the high of 64.9825/9925 levels on greenback sales by exporters ahead of the financial year-end, coupled with IPO-related inflows. Rupee fell to 65.20/21 levels early today as investors sought to exit high-risk investments in favor of safe-haven assets such as the Japanese yen, after the U.S prepared for imposing tariffs on Chinese imports, triggering fears of an escalation in trade war between the world’s two largest economies. Most Asian currencies ended mixed against the greenback. Indian shares fell over 1 percent today with the broader NSE index closing below the 10,000 level for the first time since October, after heated rhetoric between the United States and China over import tariffs sparked fears of a global trade war. The NSE Nifty closed 1.15 percent lower at 9,998.05, while the benchmark BSE Sensex ended down 1.24 percent at 32,596.54. Indian sovereign bonds ended little changed this week, ahead of the government’s meeting tomorrow to discuss the borrowing calendar, even as traders remained hopeful that New Delhi may take some measures to ease supply burden. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.90%, 4.50% and 4.06% respectively. India's foreign exchange reserves fell to $421.33 billion as of March 16, compared with $421.49 billion a week earlier, the Reserve Bank of India said.

The GBP/USD pair quickly recovered an intraday dip to sub-1.4100 level and is now headed towards challenging the top end of its daily trading range. A modest US Dollar rebound, backed by a goodish pickup in the US Treasury bond yields, turned out to be one of the key factors capping any up-move. However, Thursday's hawkish BoE vote spilt, coupled with the recent Brexit optimism continued lending some support to the British Pound and helped limit any further downside. Meanwhile, growing concerns about a possible trade war between the world's two largest economies might continue to restrict any meaningful USD up-move, which could eventually assist the pair to resume with its prior appreciating move. Traders now look forward to the US economic docket, featuring the release of durable goods orders, for some short-term trading impetus. Nevertheless, the pair remains on track to post third consecutive weekly gains and all set for its highest weekly close since early Feb.