Rupee ended higher, Euro rebounds vs. Dollar

Thursday,   16-Aug-2018   05:33 PM (IST)

The Indian rupee recouped the intraday losses and ended the session  higher at 70.15/16 levels compared to its opening at 70.19/20 levels after touching the high of 70.1350/1450 due to dollar selling by  state-run banks and  private lender at various levels, likely on instructions from the Reserve Bank of India. Rupee touched the all time low of 70.3850/3950 levels today, dragged down by wider-than-expected trade deficit data and as emerging market assets remained under pressure. Rupee traded in the range of 70.1350-70.3850 levels today. A drag in financials as well as other major sectoral indices ensured that the market managed to end the day on a negative note. The Nifty has managed to end below 11,400. The Sensex ended down 188.44 points or 0.50% at 37663.56, while the Nifty closed lower by 50.10 points or 0.44% at 11385.05. Investors fled Indian sovereign bonds this week as the local currency slumped to a record low against the dollar, as part of a global hit to emerging market assets. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.31%, 4.24% and 4.20% respectively. Indian financial markets will remain shut tomorrow for Parsi New Year.

The euro recovered on Thursday from its weakest since late June 2017 and the dollar fell after news that a Chinese delegation will travel to the United States for trade talks, with investors buying back into currencies hit hard in the recent sell-off. Many emerging market currencies also rose, clawing back some of Wednesday's losses thanks to easing fears over the knock-on effects from a slide in the Turkish lira. Global equity markets were mixed, however, underlining how nervous investors remain. China's Ministry of Commerce said it had received an invitation from the United States for talks to be held with U.S. Under Secretary of Treasury for International Affairs David Malpass. The euro rose to $1.1398, away from Wednesday's low of $1.1301.The dollar, which has gained on bouts of investor jitters as traders seek safety in the higher-yielding and most liquid currency, fell after a recent strong run. The dollar index slipped 0.1 percent to 96.613.China's yuan, which has fallen in recent months on concerns about the impact on its economy of the trade conflict with the United States, gained 0.7 percent in offshore markets to 6.9005. Emerging market currencies bounced across the board, including the South African rand, the Mexican peso and Russian rouble. Turkey's lira rallied about 3 percent to 5.7923 before a presentation by Finance Minister Berat Albayrak to investors, but is still down 34 percent against the dollar this year.