Rupee ended lower, Pound higher vs. Dollar
Tuesday,
08-Jan-2019
05:30 PM (IST)
The Indian rupee ended the session lower at 70.20/21 levels compared to its opening at 69.80/81 levels after touching the low of 70.23/24 levels tracking persistent spike in crude oil prices that prompted importers to step up greenback purchases. The benchmark Brent crude oil contract was trading higher at $58.26 per barrel. It rose as much as $58.93 in overnight trade, a three-week high. Dollar demand from importers coupled with greenback bids by foreign banks for their corporate clients dragged the rupee lower, as trading volume remained subdued but some traders cut their long dollar positions after the reference rate fixing that capped further losses. Most Asian currencies also ended lower against the greenback. Indian shares rose for the third straight session to close marginally higher today, as investors booked some profits and awaited further cues before making bets ahead of the start of another corporate result season. The benchmark BSE Sensex closed the session 0.36 percent higher at 35,980.93, while the broader NSE Nifty ended up 0.28 percent at 10,802.15. Indian government bonds rose for the first time in four sessions, as the federal government’s plan to auction a new 10-year note this week lifted appetite, even as fiscal concerns capped gains. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.18%, 3.96% and 4.03% respectively.
Sterling hovered near a one-week high on Tuesday as Britain’s parliament prepared for a debate on Prime Minister Theresa May’s Brexit withdrawal agreement ahead of next week’s vote. The run-up to the vote is likely to dominate trading of the British currency, with May set to lose the vote unless she can convince opponents within and outside her party to back her deal. Sterling’s relative strength in recent days is mostly down to dollar weakness - the pound’s performance against the euro has been more muted. The Telegraph newspaper, citing unidentified sources, reported that British and European officials were discussing the possibility of extending the formal exit process from the European Union amid fears a Brexit deal will not be approved by March 29. British Brexit minister Stephen Barclay denied the report and said the government was committed to leaving the EU on March 29. Sterling was little changed, with analysts saying that more concrete developments were needed to spark a serious rally in the pound. The pound traded as high as $1.2797 on Tuesday before edging down to $1.2765, barely positive on the day. Despite heightened volatility, the pound has remained stuck in a range against both the dollar and euro, with traders reluctant to push the currency too far one way or the other until there is greater clarity about Brexit.
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