Rupee ended lower, Euro falls vs. Dollar

Tuesday,   16-Apr-2019   05:30 PM (IST)

The Indian rupee ended the session lower at 69.60/61 levels compared to its opening at 69.49/50 levels after touching the low of 69.6950/7050 levels as dollar demand from importers and wider-than-expected trade deficit in March weighed on the local unit. However, exporters’ dollar sales and losses in crude likely limited further losses. So far the equity market has seen a sustained inflow that has proved positive for the local currency. Traders will eye from developments between U.S.-China trade deal for further cues. Rupee traded in the range of 69.47-69.6950 levels today. Most Asian currencies ended lower against the greenback. Data released yesterday showed, India’s trade deficit widened to $10.9 billion last month from a one-and-a-half year low of $9.6 billion in February. Indian shares ended at their highest closing levels on Tuesday, boosted by financial stocks such as ICICI Bank Ltd, amid sustained foreign investor buying. The benchmark BSE Sensex closed up 0.95 percent at 39,275.64, while the broader NSE Nifty ended 0.83 percent higher at 11,787.15, after surpassing 11,800-mark for the first time ever. Indian government bonds ended little changed, as investors stayed on the sidelines awaiting the minutes of the Monetary Policy Committee's April meeting for guidance on interest rates. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.93%, 4.53% and 4.27% respectively. Indian financial markets will remain close tomorrow on the occasion of Mahavir Jayanti.

The euro fell on Tuesday after several European Central Bank policymakers expressed doubt about a projected growth recovery in the second half of the year. The concerns about the euro zone’s economy come five weeks after the ECB pushed out the timing of its first post-crisis rate hike until 2020. The single currency fell 0.2 percent to $1.128 after sources told Reuters that ECB policymakers think the bank’s economic projections are too optimistic as growth weakness in China and trade tensions linger. Major currencies traded within narrow ranges. Traders are waiting for Chinese gross domestic product data on Wednesday, which may indicate the worst is over for the global economy. Chinese exports and credit data last week signaled some stabilization in economic conditions. Market volatility has eased to multi-year lows in recent weeks, though optimism over U.S.-China trade talks and strong Chinese economic data seem to be pushing investors out of safe havens and into riskier currencies, seeking higher yields. The Australian dollar was the surprise loser after Australia’s central bank left the door ajar for a possible interest rate cut. The Reserve Bank of Australia believes cutting interest rates would be “appropriate” if inflation stays low and unemployment rises, the central bank’s April board meeting minutes showed. The Australian dollar lost 0.4 percent to $0.7144 after the release of the minutes, coming off Friday’s near seven-week high. The Japanese yen remained close to 2019 lows against the U.S. and Australian dollars. The dollar held steady against a basket of other major currencies on Tuesday, with investors cautious as they looked for signs of stabilization in the global economy. The dollar index traded flat on the day at 96.950 after ending the previous session little changed.