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Rupee ended lower, EURUSD off highs vs. Dollar

Friday,   12-Jul-2019   05:27 PM (IST)

The Indian rupee ended the session lower at 68.68/69 levels compared to its opening at 68.45/46 levels after touching the low of 68.6850/6950 levels on foreign banks’ greenback purchases and uncertainty about the U.S. Federal Reserve’s next interest rate decision. However, some dollar selling interest from exporters capped larger depreciation. Indian shares closed lower after a volatile session today, led by declines in IT firm Wipro Ltd and Oil and Natural Gas Corporation Ltd. The broader NSE index closed down 0.26% at 11,552.5, while the benchmark BSE index settled 0.22% lower at 38,736.23. India government bonds jumped for a second week, with the benchmark yield posting its biggest fall in 15 months, as the budget proposal to issue sovereign bonds continued to aid investor appetite. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.78%, 4.08% and 4.35% respectively. India’s May IIP and June retail inflation data is due later today. India's foreign exchange reserves rose to $429.91 billion, as of July 5, compared with $427.68 billion a week earlier, the Reserve Bank of India said.

EUR/USD is trading above 1.1250, up on the day. Upbeat US inflation limited the dollar's fall while the Fed's Powell's intentions to cut rates weigh on it. EZ industrial production is beat expectations with 0.9%. EUR comes under selling pressure today after ECB’s Visco favoured further expansionary measures in case a rebound in the economic activity of the bloc remains absent, adding that the ECB will continue to evaluate the potential measures to be implemented. The knee-jerk in spot comes despite the Industrial Production in Euroland expanded at a monthly 0.9% during May, rebounding markedly from April’s 0.4% monthly contraction. Later in the day and across the ocean, Producer Prices for the month of June will be the sole release along with the speech by FOMC’s C.Evans. GBP/USD is trading around 1.2530, consolidating its gains. Uncertainty about Brexit limits Fed-fueled gains. The BOE's Vlieghe has said rate cuts are more likely in the case of a hard Brexit.