Rupee ends the session flat, Sterling lower against dollar
Tuesday,
12-Mar-2019
05:38 PM (IST)
The Indian rupee closed flat against the dollar as gains on account of upbeat risk sentiment got offset by dollar demand from some banks likely on behalf of the RBI. The Indian rupee opened at 69.75/76 and rose to touch a high of 69.50, before giving up its gains to close almost flat at 69.7025/7125. Indian government bonds closed little changed, ahead of February retail inflation data, while stronger rupee and bets of more open market purchases by the central bank aided sentiment. India’s benchmark BSE Sensex ended 1.3% higher while most Asian shares also rallied amid improved appetite for risk assets and tracking overnight gains in U.S. equities. In the forward segment 1mth, 3mth, 6mth and 12mth annualized premium ended the session at 4.69%, 4.29%, 3.96% and 3.81% respectively.
Sterling crashed below 1.3050, from an intraday high of 1.3289 against the dollar after UK Attorney General Geoffrey Cox gives thumbs down to the new Brexit deal. He says that the legal risk remains unchanged that the UK will have no lawful means of leaving the Irish Backstop arrangement. He did say that the reassurances reduce the risk that of an indefinite trap within the backstop and do confirm it is a legally binding document. The clarifications provide a substantive and binding reinforcement to the legal rights available to the UK. All in all, he gives the deal a bit of credit, but the fact that he says the legal risk remains is enough to convince euroskeptic to vote against it. Elsewhere, the US Commerce Department will publish February CPI figures today. Consumer prices are expected to have risen 0.2% last month, according to estimates, compared to January's flat reading. On a yearly base, CPI is projected to climb 1.6%, the same gain recorded a month earlier. Excluding the cost of food and fuel, prices are forecast to have gained 0.2% last month and 2.2% from a year ago. In commodities, the American Petroleum Institute is due to release its weekly report for the week ended March 8, amid expectations of a gain of about 2.8 million barrels.
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