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Rupee ended lower, Pound little change vs. Dollar

Friday,   08-Nov-2019   05:32 PM (IST)

The Indian rupee ended the session lower at 71.29/30 levels compared to its opening at 71.30/31 levels after touching the low of 71.3250/3350 levels after Moody’s cut the country's rating outlook and on persistent dollar purchases, likely by the central bank. However, rupee came off intraday lows against the dollar in afternoon session, on dollar sales by private banks likely on behalf of exporters. Rupee traded in the range of 71.1650-71.3250 levels today. After showing resilience in the early hours of the trade, stock market came under heavy selling pressure in the last hour of the session today after global rating agency Moody's lowered India's outlook to 'negative' from stable. The S&P BSE Sensex lost 330 points or 0.81 per cent to settle at 40,324. The Nifty50 slipped below 12,000-mark to end at 11,908, down 104 points or 0.86 per cent. India government bonds fell for the first time in four weeks after Moody’s cut India's rating outlook to 'negative' and as U.S. yields spiked amid hopes of a trade deal between the United States and China. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 2.99%, 3.33% and 3.87% respectively. India's foreign exchange reserves rose to $446.10 billion as of Nov 1, compared with $442.58 billion a week earlier.

Sterling was little changed on Friday, holding just above $1.28 and recovering from two-week lows against the dollar and euro, as investors await political developments ahead of Britain’s Dec. 12 election. The pound was pushed to a low of $1.2794 on Thursday when the Bank of England’s decision to keep rates constant was not unanimous as had been expected. Two out of nine officials voted to cut interest rates this month and others said they would consider a cut if global and Brexit headwinds did not lift. EUR/USD is trading closer to 1.1030, the lowest since mid-October. Contradicting headlines regarding the state of US-Sino trade talks have been rocking markets. US Consumer Sentiment is eyed. The euro held steady Friday, though flirting with a three-week low against the dollar as the U.S. currency benefited from news that China and the U.S. had agreed to roll back tariffs as part of a potential preliminary pact to end their trade war. China and the United States have agreed to roll back tariffs on each others’ goods in a “phase one” trade deal if it is completed, officials from both sides said on Thursday. Sentiment is likely to remain supportive for the dollar, equities and other risky assets as a de-escalation in the U.S.-China trade war removes a huge risk to the global economic outlook.