Rupee ended flat, Euro higher vs. dollar

Monday,   21-May-2018   05:37 PM (IST)

The Indian rupee ended the session flat at 68.12- 68.13 levels compared to its opening at 68.12/13 levels after touching the low of 68.1550/1650 levels as demand for the dollars, triggered by comments from Mnuchin was offset by dollar sales from state run banks. Indian government bonds rose for a third day, on expectations that the central bank will conduct another open market purchase of notes soon, a move that would ease the supply pressure. The Nifty which started on a positive note, failed to gather momentum and close marginally above its crucial support placed at 10,500 levels today. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.91%, 3.86% and 3.89% respectively.

China and the U.S. agreed over the weekend to halt imposing punitive import tariffs as negotiators set up a framework to address trade imbalances. U.S. Treasury Secretary Steven Mnuchin said on Sunday that the trade war with China is now put on hold. "We are putting the trade war on hold. Right now, we have agreed to put the tariffs on hold while we try to execute the framework," Mnuchin said. While the agreement means that both sides will avoid billions of dollars in tit-for-tat tariffs, China has yet to agree to cut the trade deficit despite President Donald Trump’s demand that the world’s second largest economy reduce its trade surplus by $200 billion. With no major U.S. economic reports set for release on Monday, market participants will focus their attention on appearances from Federal Reserve policymakers as they seek to gauge plans for policy tightening. Atlanta Fed president Raphael Bostic, Philadelphia Fed chief Patrick Harker and the head of the Minneapolis Fed, Neel Kashkari, will be giving speeches on Monday afternoon. That said, the focus this week will undoubtedly be on Fed chairman Jerome Powell who will participate in a panel discussion of "Financial Stability and Central Bank Transparency" at the Sveriges Riskbank Conference in Stockholm, Sweden on Friday. Markets are currently pricing in a rate hike at the next Fed meeting on June 12-13, in what would be the second move this year.