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Rupee ended lower, Dollar falls vs. major currencies

Friday,   11-Jan-2019   05:31 PM (IST)

The Indian rupee ended the session lower at 70.4850/4950 levels compared to its opening at 70.42/43 levels after touching the low of 70.5850/5950 levels on greenback demand from state banks, likely on behalf of importers, erasing early gains tracking dovish comments from the U.S. Federal Reserve chief. Rupee traded in the range of 70.35-70.5850 levels today. Indian shares settled lower today as disappointment over technology giant Tata Consultancy Services missing quarterly margin estimates weighed on the trading sentiment, while investors looked out for results from its rival Infosys Ltd for clarity. The benchmark Sensex closed the session 0.27 percent lower at 36,009.84, while the broader Nifty ended down 0.25 percent at 10,794.95. Indian government bonds fell for a third week, as sharp gains in crude oil prices and concerns about the country’s fiscal position continued to hurt demand for local papers. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.94%, 4.01% and 4.04% respectively. India's foreign exchange reserves rose to $396.08 billion as of Jan 4, compared with $393.40 billion a week earlier, the Reserve Bank of India said on Friday.

The dollar fell versus its major peers on Friday, as investors grew increasingly confident that the U.S. Federal Reserve may hit the pause button on monetary tightening this year. Fed Chairman Jerome Powell reiterated on Thursday the U.S. central bank has the ability to be patient on monetary policy given that inflation remains stable. Markets are now pricing in no further rate hikes by the Fed this year. Fed Vice Chair Richard Clarida also struck a dovish tone, underscoring the central bank’s willingness to remain patient on the issue of raising rates. Sentiment was still slightly cautious in Asian trade on a lack of concrete details from the United States and China on any progress in their trade dispute after a three-day meeting in Beijing. The two sides are more than halfway through a 90-day truce agreed by U.S. President Donald Trump and his Chinese counterpart Xi Jinping. Traders still remain optimistic that a trade deal between the world’s largest economies will eventually materialize. U.S. Treasury Secretary Steven Mnuchin said late on Thursday that Chinese Vice Premier Liu He will “most likely” visit Washington later in January for trade talks. The safe-haven yen strengthened 0.1 percent to 108.25 per dollar, reflecting investors’ cautious wait-and-see mode. The euro gained to $1.1532, after losing 0.4 percent of its value in the previous session. The single currency has been pressured by a slew of weaker-than-expected economic data, especially from France and Germany. The European Central Bank is widely expected to remain accommodative in 2019, which should keep a lid on the single currency.