Rupee ended lower, Pound lower vs. Dollar

Tuesday,   14-Jul-2020   02:56 PM (IST)

The Indian rupee ended the session lower at 75.4150/4250 levels compared to its opening at 75.3450/3550 after touching the low of 75.50/51 levels as new containment measures in some parts of the world to prevent the coronavirus spread cast doubts over a near-term economic revival. Rupee traded in the range of 75.29-75.50 levels today. Asian risk appetite soured on new lockdowns in California and Hong Kong to contain the spread of coronavirus. Investors were hopeful that companies will surpass beaten-down earnings expectations with the reporting season underway, but the fresh lockdowns have renewed fears of slowing economic activity. Equity markets extended their early losses and were trading at day's lowest point, down 2 per cent, on Tuesday, with financials, auto, and metal stocks dragging the indices. At 2:50 pm, the S&P BSE Sensex was trading at 36,073 down 621 point, while the broader Nifty50 was at 10,621 down 182 point. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.81%, 3.57% and 3.62% respectively.

Sterling fell to a one-week low against the dollar on Tuesday after new data showed Britain’s economy picked up more slowly than economists had forecast. Gross domestic product rose by 1.8% in May after falling by a record 20.8% in April, the Office for National Statistics said, well below forecasts in a Reuters poll. The pound fell 0.25% to $1.2519 versus the dollar and was at a one-week low against the euro at 90.53 pence. Investors also await more news on Britain’s negotiations with the European Union on concluding a trade deal for the post-Brexit period. Britain left the bloc on January 31, with a one-year transition period to iron out a future relationship. The U.S. dollar edged up on Tuesday as diplomatic tensions between the United States and China and rising coronavirus cases knocked investor confidence, although moves in currency markets were small in a quiet session. While stock markets fell as investors turned cautious, the safe-haven yen was little changed and the Swiss franc - another currency traders buy in times of uncertainty - rose only slightly versus the euro, suggesting limited concern among FX investors. A resurgence of novel coronavirus infections has caused some areas to place new restrictions on business activity, injecting some caution into the multi-month stock market rally that is betting on a rapid economic recovery. Markets now face an additional threat from tit-for-tat retaliation between Washington and Beijing over access to U.S. financial markets, civil liberties in Hong Kong and territorial claims in the South China Sea. However, they said progress in the European Union’s efforts to agree a recovery fund package this week would support the euro and limit the dollar’s rise.