Rupee ended higher, Pound higher vs. Dollar

Tuesday,   02-Jun-2020   02:43 PM (IST)

The Indian rupee ended the session higher at intraday high of 75.3625/3725 levels compared to its opening at 75.56/57 levels boosted by gains in local equities. Rupee touched the low of 75.61/62 levels early today as Moody’s downgrade of the country’s long-term credit rating was largely discounted by the market. Asian currencies and equities were broadly higher. Indian federal government bond yields fell for the first time in six sessions, as value-buying offset an early rise triggered by a credit rating downgrade by Moody's Investors Service. Equity markets were trading firm, over 1.5 per cent higher each, on Tuesday, lifted mainly by auto, and pharma stocks, after Prime Minister Narendra Modi assured that India would get its growth back. Speaking at CII's annual session, Modi said making the economy strong post Covid-19 is the top priority now and that his government was making planned and systematic reforms. At 2:09 pm, the S&P BSE Sensex was trading at 33,811, up 507 point, while the broader Nifty50 was at 9,966 up 140 point. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.81%, 3.60% and 3.66% respectively.

Sterling climbed above $1.25 to its highest in a month against the dollar on Tuesday, as signs Britain might be willing to compromise on sticking points in a fresh round of Brexit negotiations with the European Union provided support. Britain is expected to indicate flexibility over fisheries and trade rules if the European Union agrees to lessen its “maximalist” demands regarding regulatory alignment and fishing access, the Times newspaper reported on Tuesday, as a new round of talks kicks off. Britain has until July 1 to ask for an extension to the current transition period, which ends in December. Weekly positioning data for the week ended May 26 showed the market’s net short position on the pound increased for the twelfth week running. The last time investors were this bearish on the pound was in the run-up to the December 2019 election. The pound was trading higher to the dollar at $1.2539, after hitting its highest since May 1 in early deals. EUR/USD has jumped above 1.1160, trading at the highest since March. Protests in the US are grabbing the headlines and marginally supporting the dollar. European countries continue reopening their economies amid falling coronavirus statistics.