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Rupee ended higher, Pound lower vs. Dollar

Monday,   11-Feb-2019   05:22 PM (IST)

The Indian rupee ended the session higher at 71.1650/1750 levels compared to its opening at 71.23/24 levels after touching the high of 71.10/11 levels aided by hopes of inflows into local bonds after the nation’s rate-setting panel unexpectedly cut key interest rate last week. However, slump in local shares limited major gains in the rupee. Rupee traded in the range of 71.10-71.29 levels today. Most Asian currencies ended lower against the dollar as traders remained focused on U.S.-China trade talks. Indian government bonds fell for a second session, as the government’s increased borrowing plan continued to hurt demand, while traders awaited retail inflation data. Indian shares fell today, dragged by declines in energy stocks including index-heavyweight Reliance Industries Ltd, as investors fretted over global uncertainties and lackluster quarterly earnings. The benchmark BSE Sensex settled 0.41 percent lower at 36,395.03. The broader NSE Nifty declined 0.50 percent to 10,888.8. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.07%, 4.18% and 4.04% respectively.

Sterling extended its fall on Monday after data showed that Britain’s economy last year grew at its slowest since 2012, with Brexit uncertainty hitting investment. The quarterly GDP numbers followed other data in recent weeks that paint a picture of a UK economy slowing into 2019 as businesses and consumers grow increasingly nervous about Britain’s departure from the European Union. Gross domestic product growth in the final quarter of 2018 fell to a quarterly rate of 0.2 percent from 0.6 percent in the previous quarter - in line with the average forecast in a Reuters poll but slightly weaker than the Bank of England estimated last week. For 2018 as a whole, growth dropped to its lowest since 2012 at 1.4 percent, down from 1.8 percent in 2017. The pound fell 0.3 percent to as low as $1.2895 after trading at $1.2923 before the data was released. Sterling last week suffered its worst weekly decline in a month, with a stalemate over Brexit weighing on the currency and leading the Bank of England to cut its UK growth forecast. Brexit negotiations continue to hang over sterling and will likely dominate trading in the coming sessions. Prime Minister Theresa May has rejected the idea of targeting a customs union with the EU and fears are growing that the British leader is playing a game of brinkmanship as she tries to secure backing for her withdrawal agreement ahead of the scheduled Brexit departure date of March 29.