Rupee ended at lifetime low, Euro lower vs. Dollar

Monday,   13-Aug-2018   05:40 PM (IST)

The Indian rupee hits lifetime low today and ended the session at 69.9325/9425 levels compared to its opening at 69.47/48 levels after touching the all time low of 69.94/95 levels tracking a sell-off in emerging market assets following fresh slump in Turkish lira. However, greenback sales by state-run and private banks at various levels, apparently on behalf of the Reserve Bank of India, restricted further fall. Rupee traded in the range of 69.41-69.94 levels. The broader NSE Nifty fell 0.65 percent to 11,355.75. The BSE index ended 0.59 percent lower at 37,644.90. Indian sovereign bonds plunged, with the benchmark yield posting its biggest single-session rise in over two months, as the rupee tumbled to a record low against the dollar. The benchmark 7.17% bond maturing in 2028 settled at 95.70 rupees, lowest since Jul. 11, yielding 7.82%, in Mumbai against 96.14 rupees, and a 7.75% yield, at previous close. The benchmark bond yield rose 7 basis points today, most since Jun. 7. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.62%, 4.30% and 4.29% respectively. Local traders now await India’s July retail inflation data later today.

Euro is trading down at around 1.1388 as Turkey-led crisis spurs risk-off sentiment favoring the US Dollar. The Euro opened with the gap on the downside falling to 1.1364 against the US Dollar and after closing the gap it is proceeding lower as the Turkish central bank refused to raise rates and lowered the reserve requirements ration to combat currency crisis. Euro is negatively affected by the economic crisis and Turkish lira selloff as many of the Euro zone big banks are active in Turkey with the ECB voicing concerns about their exposure to Turkey last week. The US Dollar is trading down at around 110.40 against the Japanese Yen, falling to the lowest level since July 9. The Japanese Yen is benefitting from the safe haven status at times of risk-off sentiment with Turkey’s currency crisis continuing since the last week. The pound languished near 13-month lows on Monday, as investors bet on continued dollar strength and uncertainty over whether Britain would secure a trade deal with the European Union before it exits the bloc. Sterling lost 2 percent of its value last week because of growing unease among investors that Britain was headed for a future where it lacked an established relationship with its largest trading partner, the EU.