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Rupee ended higher, Australian dollar higher vs. Dollar

Wednesday,   09-Oct-2019   05:26 PM (IST)

The Indian rupee ended the session higher at 71.07/08 levels compared to its opening at 71.18/19 levels after touching the high of 70.9425/9525 levels on dollar sales by foreign banks, which trimmed fall triggered by escalating U.S.-China trade tensions a day ahead of imminent high-level talks between the two nations. Rupee rose to 70.9425/9525 in late trade following a Bloomberg report that said China is still open to agreeing to a partial trade deal with the U.S despite the recent blacklisting of Chinese technology firms. Rupee traded in the range of 70.9425-71.22 levels today. Indian government bonds ended higher for a second straight session, led by short-covering ahead of high-level trade talks between the U.S. and China that will start tomorrow and domestic retail inflation data next week. Snapping their six-day losing streak, the benchmark indices staged a smart comeback today to end nearly 2 per cent higher, led by heavy buying in banking stocks. The S&P BSE Sensex added 646 points or 1.72 per cent to end at 38,177.95 levels. The broader Nifty50 index of the National Stock Exchange (NSE) ended at 11,313.30 levels, up 187 points or 1.68 per cent. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.62%, 3.62% and 4.83% respectively.

Currencies linked with greater investor risk appetite, such as the Australian dollar, jumped on Wednesday after Bloomberg reported China remained open to signing a partial trade deal with the United States despite being put on the tech blacklist. The U.S. government has widened its trade blacklist to include some of China’s top artificial intelligence start-ups, punishing Beijing for its treatment of mostly Muslim minorities and ratcheting up tensions ahead of high-level trade talks in Washington this week. The Australian dollar, a global risk barometer, was last up 0.3% at $0.6744 and the New Zealand dollar rose 0.4% to $0.6319. China's Yuan was up 0.5% at 7.1308 against the dollar in the offshore trading.  The euro was up 0.3% at $1.09785. The index that tracks the dollar against a basket of six other currencies was down 0.1% at 99.007. The biggest move in the foreign exchange market, however, was an early morning plunge in the Swedish crown, both against the euro and the dollar, on concerns the U.S.-China conflict over trade and foreign policy was nowhere near a resolution and was increasingly damaging the global economy. Sweden’s open economy makes the crown vulnerable to global growth dynamics and therefore to the trade dispute between the world’s two biggest economies, which has hurt growth in the two years since U.S. President Donald Trump ignited the trade war. The Swedish crown was last steady, after falling earlier to a 10-year low of 10.9230 against the euro and a 17-year low of 9.9639 against the dollar.