Rupee ended lower, Pound lower vs. Dollar

Monday,   17-Jun-2019   05:25 PM (IST)

The Indian rupee ended the session lower at 69.90/91 levels compared to its opening at 69.80/81 levels after touching the low of 69.9425/9525 levels as the greenback strengthened on the back of solid macro data from the U.S. and local shares extended losses. Rupee traded in the range of 69.75-69.9425 levels today. Fitch cuts India FY20 GDP growth forecast by 20 bps to 6.6% and retains India FY21 GDP growth forecast at 7.1%. Indian government bonds ended lower on profit taking after sharp gains in the previous session, as traders’ focus shifts to the Federal Reserve meeting. Indian shares ended more than 1% lower dragged by metal and energy stocks, while the country’s move to slap retaliatory tariffs on certain U.S. goods stoked fears of a trade tiff between the two countries. The broader Nifty closed 1.28% lower at 11,672.15, while the benchmark Sensex was down 1.25% at 38,960.79. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.64%, 4.58% and 4.45% respectively.

The pound extended a six-week losing streak against the euro on Monday, as concern grew that Britain was heading for a no-deal Brexit after Boris Johnson got a boost in his bid to replace Prime Minister Theresa May. Health Secretary Matt Hancock, who dropped out of the race on Friday after winning just 20 votes in the first ballot of Conservative lawmakers, said Johnson was the best candidate to lead the party. Johnson, the face of the official Brexit campaign in the 2016 referendum, has promised to lead the United Kingdom out of the EU with or without an agreement by Oct. 31. On Monday, the pound edged 0.1% lower against the euro to 89.10 pence. It was steady against the dollar, around $1.2583. A median forecast for the chance of a disorderly Brexit rose to 25% in a June 11-14 Reuters poll, up from the 15% in May. Latest positioning data also indicated markets were getting cautious about the pound, with speculative bets against the British currency rising to a four-week high. The second round of voting in the Tory leadership contest is set for Tuesday, with the result due around 1700 GMT. Any candidate with 32 votes or fewer is eliminated. If all candidates have more than 32 votes, the one with the fewest is eliminated.