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Rupee ended weaker, Pound steady vs. Dollar

Monday,   13-May-2019   05:25 PM (IST)

The Indian rupee ended the session weaker at intraday low of 70.53/54 levels compared to its opening at 70.14/15 levels dragged by weak Chinese Yuan and higher crude oil prices that dented investors’ risk appetite. Traders suspected dollar sales by at least two state-run banks in smaller quantum intra-day at around 70.40 levels, likely on the instructions of the Reserve Bank of India. Some market participants said central bank may have intervened in currency futures. Asian shares and currencies too plummeted against the dollar. The off-shore Yuan dropped 0.9% at 6.9070, it’s lowest since Dec. 24, 2018, as global risk-off continued due to on-going trade tussle between the U.S. and China. Rupee traded in the range of 70.09-70.53 levels today. Traders will keep a close eye on the developments related to trade talks and CPI release at home Indian shares closed weaker for a ninth straight session today, dragged by financial and pharmaceutical stocks, as concerns over the country’s non-banking finance sector (NBFC) coupled with global slowdown worries whacked investor sentiment. The benchmark BSE index ended down 0.99% at 37,090.82. The broader NSE index closed 1.16% lower at 11,148.2. Indian government bonds rose today as investors covered short positions before the release of the latest inflation data. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.38%, 4.35% and 4.22% respectively.

Sterling was little changed on Monday after a newspaper report suggested the British parliament might still reach a cross-party deal on Brexit, though doubts about such an agreement kept the currency from gaining. Up to 150 lawmakers from Britain’s opposition Labour party would reject an agreement that did not include a referendum confirming it, the Guardian newspaper reported shadow Brexit secretary Keir Starmer had said. Many members of the ruling Conservative party oppose a second referendum, but the fact talks are still being held is keeping sterling from booking losses, analysts said. Sterling was flat at $1.30 against the dollar — roughly the middle of the $1.2851-$1.3190 range of recent weeks — and 86.33 per euro. Investors will also be unwilling to commit too far either way before UK labour market data due on Tuesday. With business investment curtailed by Brexit uncertainty, the Bank of England is unlikely to raise interest rates, they said. Sterling buyers brushed aside an opinion poll that showed UK Prime Minister Theresa May’s Conservatives had slumped to fifth place before European parliamentary elections and Nigel Farage’s Brexit Party had surged.