Rupee ended flat, Pound lower vs. Dollar

Friday,   10-Aug-2018   05:25 PM (IST)

The Indian rupee recouped the day’s losses and ended the session flat at 68.8250/8350 levels compared to its opening at 68.83/84 level on dollar sales by state-run banks and exporters. Some dealers also speculated these sales were on behalf of the central bank. Rupee touched the low of 69.02/03 levels today due to sell-off in other emerging market currencies, as the dollar index jumped to a more-than-one-year high amid fears of escalation in global trade tensions. During the session rupee traded in the range of 68.7225-69.02 levels. Indian government bonds ended steady this week, as a fall in crude oil prices eased inflation concerns, while weakness in the rupee hurt demand. Bonds fell today due to fresh supply and as rupee hit an over two-week low. Equity markets ended sharply lower on Friday with the Sensex settling at 37,869.23, down by 155.14 points, or 0.41 percent lower, while the Nifty closed at 11,429.50, declinnig 0.36 percent or by 41.20 points. After starting on a flat note, the BSE Sensex and the NSE Nifty 50 stayed weak through the day amid profit-booking in bank, financial and realty stocks. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.26%, 4.27% and 4.28% respectively. India's foreign exchange reserves fell to $402.70 billion as of Aug 3, compared with $404.19 billion a week earlier, the Reserve Bank of India said. Traders now await India’s July retail inflation data on Aug. 13. India’s industrial production data for June, meanwhile, is due post market close.

Sterling slid to its lowest level since June 2017 on Friday as a stronger dollar and continued concerns that Britain could leave the European Union without a trade deal pushed investors to sell pounds. The British currency dropped 0.7 percent to as low as $1.2734, roughly in line with the dollar’s rise against a basket of major currencies. That brings sterling’s loss since Monday to 1.9 percent and leaves it headed for its worst weekly performance since February. Official data on Friday showing Britain’s economy picked up some speed in the second quarter - growing at an expected 0.4 percent after a winter slowdown - failed to move the pound. The data also pointed to an economy losing momentum in June. Against the euro, the pound has held up far better as demand for dollars - fuelled on Friday by an investor rush into safer assets - has kept the euro on the back foot. The pound traded up 0.1 percent to 89.865 pence per euro, above its recent 2018 lows of 90.30 pence. Sterling has been pushed lower as investors rush to protect themselves from further weakness in the run-up to Britain’s exit from the EU next March. While most investors still expect Britain to secure a trade deal with the EU, the risk of no deal is rising. Warnings this month from Bank of England Governor Mark Carney and trade minister Liam Fox, that the prospect of a no-deal Brexit was growing, set off the recent slide.