Rupee ended flat, Pound lower vs. Dollar

Friday,   24-Jan-2020   05:29 PM (IST)

The Indian rupee ended the session flat at 71.3250/3350 levels compared to its opening at 71.33/34 levels as traders remained on the sidelines eying dollar inflows into local equities and latest updates on the spread of a virus outbreak in China. Rupee traded in the range of 71.23-71.34 levels today. At close, the Sensex settled at 41,613.19 levels, up 226.79 points or 0.55 per cent. The Nifty50 was reclaimed 12,250-mark in the intra-day trade today and hit a high of 12,272.15. The 50-share index ended 67.90 points, or 0.56 per cent, higher at 12,248.30 marks. Indian government bonds ended higher for the first week in three, as crude oil prices fell, while aggressive cutoffs at the central bank’s special open market operation aided sentiment ahead of next week’s federal budget. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.54%, 4.05% and 4.08% respectively. India's foreign exchange reserves rose to $462.16 billion as of Jan. 17 from $461.21 billion a week earlier, the Reserve Bank of India (RBI) said.

Sterling retreated on Friday, after initially strengthening, as some investors still expected an interest rate cut next week even though business surveys pointed to a post-election bounce in the UK economy. Analysts said traders were taking profits on recent gains in the currency, and because money markets still priced in a 50% chance of a rate cut when the Bank of England meets next Thursday. The ‘flash’ early readings of the IHS Markit/CIPS UK Purchasing Managers’ Index (PMI) showed Britain’s vast services sector returned to growth in January for the first time since August, while a downturn in manufacturing eased. The release was widely anticipated after several BoE policymakers said earlier this month that they would vote for a cut to rates if Britain’s economy did not soon show a marked improvement. That knocked the pound last week, but this week it recovered as a series of business surveys suggested the UK economy could be picking up. The composite PMI, which combines manufacturing and services indexes, rose to 52.4 from 49.3, the highest reading since September 2018 and breaking beyond the 50 mark which indicates activity is growing. The services PMI rose in January to 52.9 from 50.0, also its highest level since September 2018. Sterling jumped to as high as $1.3180 immediately after the surveys were released before falling back. It was last down 0.2% at $1.3102. It also erased its gains versus the euro. The pound traded flat on the day at 84.27 pence. Money markets currently assign a 50% probability of a rate cut next week, down from a high of 70% on Monday.