Rupee ended almost flat, Euro rose vs. Dollar

Thursday,   13-Dec-2018   05:32 PM (IST)

The Indian rupee ended the session almost flat at 71.68/69 levels compared to its opening at 71.70/71 levels. Rupee moved up to 71.51/52 levels today as lower-than-expected retail inflation data at home lifted local sentiments and added to a risk-on rally in the global markets. However, rupee trimmed the gains in later deals due to slight dollar buying in the market. Rupee traded in the range of 71.51-71.72 levels. Indian shares ended higher today after inflation eased sharply in November, and the new central bank governor’s move to open up a dialogue with lenders boosted financial stocks. The broader NSE index closed 0.5 percent higher at 10,791.55, while the benchmark BSE index ended 0.42 percent higher at 35,929.64. Indian government bonds rose for a third straight session, as inflation slowing to a 17-month low in November raised bets of a shift in monetary policy stance in the next review meet. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.10%, 3.96% and 4.04% respectively.

The euro rose slightly on Thursday after Italy said it would cut its budgetary spending plans in a row with the European Union, although traders were in a cautious mood ahead of the European Central Bank’s monetary policy meeting. Global markets were mostly positive at the start of the day on signs of easing Sino-U.S. trade tensions and expectations that China will increase support for its cooling economy. That spilled into currencies, with the Australian dollar a barometer of risk sentiment and China's economic fortunes gaining 0.3 percent. While the ECB is set to announce formally an end to its vast quantitative easing program at a policy meeting later on Thursday, the move will be tempered by the central bank likely expressing caution about the outlook for the economy. Investors are hoping to find out whether the ECB will start raising interest rates before ECB President Mario Draghi’s term ends in October next year. The dollar has suffered in recent weeks after an eight-month rally, as investors curb their expectations for more Federal Reserve policy tightening in 2019 and on signs of a thaw in the U.S.-China trade conflict. Against a basket of its rivals, the dollar index slipped 0.1 percent 96.945. Elsewhere, sterling was the big story after Prime Minister Theresa May fought off a bid to unseat her by her colleagues unhappy with her Brexit plans. After rallying ahead of the result, the pound was mostly unmoved by the result as the relatively narrow margin of her victory underlined the extent of opposition that remains to the Brexit withdrawal agreement she had struck with Brussels. May heads to Brussels on Thursday for help in trying to sell a tweaked version of that deal to her colleagues.