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Rupee ended lower, Dollar steady vs. major currencies

Friday,   26-Jun-2020   02:30 PM (IST)

The Indian rupee ended the session lower at 75.6450/6550 levels compared to its opening at 75.52/53 levels after touching the low of 75.6550/6650 levels on dollar purchases from state-run banks, likely on behalf of the Reserve Bank of India. Rupee traded in the range of 75.4350-75.64 levels today. Rupee touched the high of 75.4350/4450 levels today on foreign banks’ greenback sales amid likely corporate dollar inflows from Jio Platforms’ stake sale. Indian government bond yields stayed little changed, as the weekly debt sale outcome matched expectations, while traders still await market-supportive steps from the central bank. Equity markets were trading higher in Friday's volatile session, lifted by gains in public sector banks and IT stocks. At 2:11 pm, the S&P BSE Sensex was trading at 35,037, up 195 point, while the broader Nifty50 was at 10,350 up 61 point. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.61%, 3.58% and 3.73% respectively.

The dollar steadied on Friday but was set for its biggest weekly drop in three weeks as caution over growing coronavirus infections cast doubt over the U.S. economic outlook while a bounce in stocks pushed the kiwi dollar higher. Though an easing in European lockdown rules bodes well for sentiment in the region, headlines from other major economies weighed on sentiment. The governor of Texas temporarily halted the state’s reopening on Thursday as COVID-19 infections and hospitalizations surged. Texas, at the forefront of efforts to reopen devastated economies shut down by the pandemic, has seen one of the biggest jumps in new cases. With markets undecided between hopes of a quick economic recovery and fears of a second wave of infections, investors focused on the dovish minutes by the European Central Bank this week to keep its stimulus policies in place for a while. The euro zone is “probably past” the worst of the economic crisis caused by the coronavirus pandemic, European Central Bank President Christine Lagarde said on Friday, while urging authorities to prepare for a possible second wave. The euro edged 0.1% higher versus the dollar and was set for its biggest rise in three weeks. Against its other European rivals such as the Norwegian crown and the Swedish currency it rose as much as 0.2% each. The New Zealand dollar led currency gainers as encouraging recent data prompted investors to add risk positions despite the surge in infection rates.