Rupee ended higher, Euro gains vs. Dollar

Wednesday,   15-Jul-2020   02:47 PM (IST)

The Indian rupee ended the session higher at 75.1450/1550 levels compared to its opening at 75.34/35 levels after touching the high of 75.14/15 levels as early-stage trials on a likely vaccine rekindled hopes of a cure for the coronavirus hurt demand for the safe-haven dollar and helped equities rebound. Rupee traded in the range of 75.14-75.36 levels today. Asian currencies were up between 0.1% to 0.3%. Indian government bond yields ended marginally lower after a two-day rise, with traders adding positions as bets of more steps from the central bank aided sentiment, even as higher inflation dampened aggressive rate-easing bets. Benchmark indices rose over a per cent on Wednesday, lifted mainly by tech stocks and Reliance Industries. At 2:10 pm, the S&P BSE Sensex was trading at 36,704 up 671 point, while the broader Nifty50 was at 10,793 up 186 point. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.75%, 3.61% and 3.67% respectively.

Risk sentiment was upbeat in currency markets on Wednesday, as signs of progress towards a COVID-19 vaccine and a Wall Street equities rebound on Tuesday pushed commodity currencies higher and the dollar to a one-month low. Moderna Inc’s experimental vaccine for COVID-19 provoked immune responses in all 45 healthy volunteers in an ongoing early-stage study in the United States. Global equities gained following on from a Wall Street rebound on Tuesday, with the optimism continuing through the Asian session, although Chinese shares sold off somewhat. European equities were set to continue the bullish trend. Hopes that European Union leaders will reach an agreement about the proposed coronavirus recovery fund at the EU summit on Friday and Saturday saw the euro rise to a four-month high of $1.14230 around 0010 GMT. German Chancellor Angela Merkel said in a news conference with Spanish Prime Minister Pedro Sanchez on Tuesday that Germany would push for a compromise. Italian Prime Minister Giuseppe Conte warned during a news conference with Merkel on Monday that the EU economic stimulus for member states should not carry too much conditionality. The euro extended gains and hit a four-month high of $1.1445. U.S. President Donald Trump ended Hong Kong’s preferential status as a trading partner. China responded by saying it will impose retaliatory sanctions on the United States. The dollar index fell in the early hours of the morning, hitting a one-month low of 96.032. The offshore Chinese yuan hit a one-week high overnight, unaffected by the renewed Sino-U.S. tensions. The Australian and New Zealand dollars both gained around 0.3% versus the U.S. dollar, with the Aussie at 0.6999 and the Kiwi at 0.6552. The Norwegian crown gained around 0.5% against the dollar, at 9.324. Markets overlooked a downgrade in Japan GDP estimates at a policy meeting with the yen little changed, at $107.01.