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Rupee ended higher, Pound extends gain vs. Dollar

Thursday,   26-Mar-2020   05:30 PM (IST)

The Indian rupee ended the session higher at 75.15/16 levels compared to its opening at 75.8650/8750 levels after touching the high of 75.10/11 levels as local equities strengthened following the announcement of a welfare package for some citizens and as the dollar index slipped for the fourth day.. Rupee traded in the range of 75.10-75.95 levels today. India’s BSE Sensex ended higher today. The gains today came after India’s federal government announced a welfare package worth 1.70 trillion rupees targeted at migrant workers and the poor to immediately address their concerns amid a nationwide lockdown to contain the coronavirus pandemic. Though the benchmark index pared some of its early gains, it did manage to recover by the end of the session. Market participants had expected a comprehensive stimulus package to help corporates tackle the economic slowdown and boost economic growth, traders said. This was after the U.S. approved a $2-trillion fiscal stimulus bill, which further helped in easing risk aversion. The S&P BSE Sensex ended 1,411 points or around 5 per cent higher at 29,947 levels while the NSE's Nifty50 ended 324 points or around 4 per cent higher at 8,641 mark. Indian government bonds ended higher for a second straight session after the government did not hint at any additional market borrowing, while announcing a financial package to shield the economy from the effects of the novel coronavirus outbreak. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 8.66%, 5.94% and 5.05% respectively.

 

Sterling extended gains against the dollar on Thursday, before an expected show of support for the British economy from the Bank of England and the government to limit the economic hit from the coronavirus outbreak. The BoE, which made two emergency rate cuts and ramped up its bond-buying programme this month, publishes its latest monetary policy statement at 1200 GMT. It is expected to hold fire on further action for now but stress it is ready to do more - probably by expanding its bond-buying even more - if needed to stop a coronavirus-related shutdown from plunging the country into a long recession. Separately, finance minister Rishi Sunak is expected to detail how he plans to support Britain’s 5 million self-employed workers through the crisis. The pound has been hammered in recent weeks amid panic in global markets, touching lows not seen since 1985 last week as investors scrambled for dollars - the world’s most liquid currency and one seen as a safe haven in times of crisis. A $2 trillion stimulus package agreed by U.S. politicians to shield the world’s biggest economy and coordinated action by central banks including the BoE to boost the supply of dollars have helped ease stress in money markets and some of the selling pressure on sterling. EUR/USD has edged above 1.09 after the US Senate passed the stimulus bill to counter coronavirus, which has taken the lives of over 20,000 people. US jobless claims are set to be in the millions. German GfK consumer confidence plunged to 2.7 and EU leaders speak later.