Rupee ended off intraday low, Euro edges up vs. Dollar

Tuesday,   14-Aug-2018   05:30 PM (IST)

The Indian rupee ended the session off intraday low at 69.8950/9050 levels helped by a rebound in the Turkish lira and suspected intervention by the central bank at home. Rupee today breached the psychologically important 70 per dollar mark to hit an all-time low of 70.08/09 per dollar, as concerns about Turkey’s economic woes persisted. However, it pared losses on dollar sales by at least two large state-run banks and a private lender, likely on instructions of the Reserve Bank of India. Rupee traded in the range of 69.69-70.08 levels today. Most Asian currencies also ended higher against the greenback. India's annual rate of inflation based on wholesale prices eased to 5.09 per cent in July from a four-year high of 5.77 per cent in June. The benchmark indices ended higher today taking cues from their global peers and helped by pharmaceutical, information technology and financial stocks. The S&P BSE Sensex ended at 37,852, up 207 points while the broader Nifty50 index settled at 11,435, up 79 points. Indian government bonds ended little changed, amid caution on the rupee’s movement and ahead of the release of the Monetary Policy Committee’s latest policy meeting minutes. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.33%, 4.29% and 4.25% respectively. Indian financial markets will remain shut tomorrow for Independence Day.

The euro recovered on Tuesday from earlier losses linked to the collapse of the Turkish lira, but investors said the exposure of European banks to Turkey would continue to hound the single currency. The lira has fallen almost 30 percent this month on concerns about a diplomatic rift with the United States and President Tayyip Erdogan's reluctance to raise interest rates despite rising inflation. The lira pulled back on Tuesday from Monday’s record low of 7.24 after the Turkish central bank pledged to provide liquidity in response to a meltdown that unsettled global markets. The euro traded up 0.1 percent on Tuesday at $1.1429, having fallen to a 13-month low of $1.1365 on Monday. So far this month it has lost 2.4 percent. Investors remain nervous about the plunge in the lira, prompting capital outflows from other emerging markets that run hefty current account deficits and rely on foreign capital. Traders shifted into currencies deemed safer, such as the yen and Swiss franc, underlining market worries about Turkey, but on Tuesday those jitters appeared to subside. The dollar was headed for its biggest daily decline this month and versus a basket of major currencies was down 0.2 percent at 96.230. It had rallied since the Turkish lira crisis erupted last week. China’s economy is showing further signs of cooling as the U.S. prepares to impose even tougher trade tariffs. Investment in the first seven months of the year slowed to a record low and retail sales softened, data released on Tuesday showed.