Rupee ended tad lower, Euro trading flat vs. Dollar

Tuesday,   17-Jul-2018   05:24 PM (IST)

The Indian rupee ended the session tad lower at 68.45/46 levels compared to its opening at 68.39/40 levels after touching the low of 68.4650/4750 levels on greenback demand from foreign banks and some importers. Rupee touched the high of 68.28/29 levels in afternoon deals today helped by slump in global crude oil prices and broad weakness in the greenback ahead of the Federal Reserve Chairman Jerome Powell's congressional testimony. Most Asian currencies also ended higher against the greenback. Indian shares snapped two straight sessions of losses today helped by gains in financial stocks and oil companies including Hindustan Petroleum Ltd. The broader NSE Nifty closed 0.65 percent higher at 11,008.05, while the benchmark BSE Sensex rose 0.54 percent to 36,519.96. Indian government bonds rose for the first time in three sessions, tracking a slump in the global crude oil prices that eased some inflation worries. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.39%, 4.15% and 4.20% respectively.

Euro is trading eased off the highs to trade flat near 1.1700 levels against the US Dollar ahead of the US Federal Reserve chairman Jerome Powell's Congressional testimony. Overnight, the Minneapolis Federal Reserve President Neel Kashkari claimed the flattening yield curve requires the end of the rate hiking cycle. Neel Kashkari, a well-known policy dove stands in complete opposition to the rest of the Committee while the Federal Reserve chairman Jerome Powell is expected to deliver remarks in Congress painting the picture of gradual rate increases later on Tuesday. Sterling is trading lower at around 1.3210 as the Federal Reserve chairman Jerome Powell is expected to speak in the US Congress after expectations meeting UK labor market data. The average weekly earnings excluding bonuses decelerated to 2.7% while remained steady at 2.5% y/y including bonuses. The claimant count rose 7.8K in June while the unemployment rate remained at 4.2%. The labor market data confirmed the robustness of the UK labor market and increased the chances of August rate hike from the Bank of England.  Meanwhile, the Bank of England Governor Carney accompanied with Deputy Governor Cunliffe testify in UK parliament on Financial Stability report, but comment little about monetary policy issues.  The UK Prime Minister Theresa May won the approval of the House of Commons after she adopted Brexiteer amendments to a key piece of customs legislation, and the proposals were narrowly voted through the House of Commons late Monday.