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Rupee ended off intraday high, Dollar higher vs. Euro

Friday,   08-Feb-2019   05:36 PM (IST)

The Indian rupee ended the session off intraday high at 71.30/31 levels. Rupee opened at 71.38/39 levels today and moved up to touch the high of 71.0350/0450 levels on the back of decline in crude oil prices. However, by the end of the day rupee trimmed the gains due to broad weakness in shares on trade worries. Rupee traded in the range of 71.0350-71.4175 levels today. Most Asian currencies ended little changed to higher today. Indian shares ended over 1 percent lower today hammered by auto stocks such as Tata Motors Ltd after the automaker stunned markets by posting the biggest-ever quarterly loss in Indian corporate history. The broader NSE Nifty closed 1.14 percent lower at 10,943.60, while the benchmark BSE Sensex was down 1.15 percent at 36,546.48. Indian government bonds posted their best week in seven, as the rate-setting panel unexpectedly cut rates and shifted focus to growth, fueling bets of further policy easing. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.01%, 4.16% and 4.04% respectively. India's foreign exchange reserves rose to $400.24 billion as of Feb 1, compared with $398.18 billion a week earlier, the Reserve Bank of India said.

The dollar was holding close to two-week highs against the euro in early trading in Europe Friday after a report downplaying the chances of the U.S. and China ending their trade war. The latest leg up came after a Wall Street Journal report said it was "highly unlikely" that Presidents Donald Trump and Xi Jinping would meet to resolve their trade differences before new U.S. tariffs come into force on March 1. Such bearish comments tend to support the dollar, whose safe haven function comes to the fore when trade tensions rise. But the dollar’s strength is also a function of other currencies’ weakness right now, especially since the Federal Reserve has effectively put further interest rate increases on hold. Earlier Friday, trade figures from Germany were in line with the weak pattern of recent data, showing exports near their lowest level in two years in December. The data hint at a growing impact from Brexit on Europe’s largest economy: the sharpest drop in both exports and imports was with non-euro-zone members of the EU, of which the U.K. is by far the largest. The British pound has been range-bound since the Bank of England’s press conference Thursday, where Governor Mark Carney repeated that the next interest rate move could be up or down, depending how Brexit plays out. Elsewhere, the Aussie dollar fell sharply after the Reserve Bank of Australia cut its growth forecasts. It’s lost nearly 2.5% this week as the RBA has dropped its tightening bias under the influence of the Chinese economic slowdown. Chinese markets remained closed for the Lunar New Year holiday.