Rupee ended higher, Pound higher vs. Dollar

Friday,   16-Nov-2018   05:26 PM (IST)

The Indian rupee ended the session higher at 71.92/93 levels compared to its opening at 71.99/72.00 levels after touching the high of 71.71/72 levels helped by greenback sales by foreign and state-run banks likely for their corporate and exporters clients. However, greenback purchases by some state-run banks limited further gains. Rupee trimmed some of its gains in late trade as banks pared their short dollar positions Indian shares posted their best close in more than six weeks today powered by gains in the country’s biggest company by market value Reliance Industries Ltd. The broader NSE index closed 0.62 percent higher at 10,682.2, while the benchmark BSE index ended up 0.56 percent at 35,457.16. Both the indexes finished the week 0.9 percent higher. Indian government bonds fell for the first time in six weeks, as investors sold notes to benefit from a recent rally triggered by the plunge in crude oil prices to multi-month lows. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.20%, 3.91% and 4.11% respectively. India's foreign exchange reserves fell to $393.01 billion as of Nov 9, compared with $393.13 billion a week earlier, the Reserve Bank of India said.

Sterling rallied on Friday, despite concerns over Brexit and the resignation of key officials in Prime Minister Theresa May’s government. GBP/USD rose to 1.2818, after slumping to 1.2739 on Thursday after Brexit minister Dominic Raab resigned. Raad said he could not support the prime minister’s support terms of the draft. Meanwhile at least 16 members of the Conservative Party have called for a vote of no confidence in May, increasing the chance of the country leaving the European Union in March without a deal. Without a deal, the UK would move to customs arrangement set by the World Trade Organization for external states. The U.S. dollar index rose 0.09% to 96.88, as trade war uncertainty lingered. A White House official told Reuters on Thursday that China’s written response to U.S. demands for trade reform are unlikely to lead to a deal in talks between U.S. President Donald Trump and Chinese President Xi Jinping at the G20 summit later this month. Tariffs on $200 billion of Chinese goods are set to increase to 25% from 10% on Jan. 1. The dollar was lower against the safe-heaven Japanese yen, with USD/JPY falling 0.30% to 113.30. In times of uncertainty, investors tend to invest in the Japanese yen, which is considered a safe asset during periods of risk aversion.