Rupee ended tad higher, Dollar rose vs. major currencies

Monday,   10-Aug-2020   02:42 PM (IST)

The Indian rupee ended the session tad higher at 74.8925/9025 levels compared to its opening at 74.9550/9650 levels after touching the high of 74.8550/8650 levels as dollar inflows relating to institutional placements and strong local shares offset the impact of a rebound in the dollar index. Rupee opened marginally lower on the back of a decline in most regional peers, but persistent dollar offers by foreign banks helped the rupee strengthen. India's Housing Development Finance Corp and Axis Bank have last week launched qualified institutional placements. India's federal government bond yields erased most of the day’s gains on value purchases, while traders continue to hope for bond-supportive measures from the central bank, after a status quo on the policy front last week. The equity markets were trading over half a per cent higher in Monday's range-bound session ahead of the Supreme Court hearing on adjusted gross revenue (AGR) case. At 2:31 pm, the S&P BSE Sensex was trading at 38,181 up 140 point, while the broader Nifty50 was at 11,280 up 66 point. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.42%, 3.51% and 3.63% respectively.

The dollar rose in early London trading on Monday, including versus the euro and Swiss franc, with investors focusing on fiscal stimulus in the United States and U.S.-China tensions ahead of key trade talks on August 15. After talks in Washington over the next round of fiscal stimulus broke down, U.S. President Donald Trump signed executive orders on Saturday, partially restoring enhanced unemployment payments to tens of millions of jobless Americans. Speculators increased their net short dollar positions in the latest week, according to weekly futures data on Friday. The dollar index was at 93.5 at 0730 GMT, up 0.1% on the day. The euro was down 0.2% versus the dollar, at $1.17685, while the safe-haven Swiss franc was had also slipped 0.2% versus the U.S. currency to 0.914. The dollar had strengthened at the end of last week as tensions between the United States and China escalated, with the U.S. imposing sanctions on top Hong Kong and Chinese officials. Prominent democracy activist, Hong Kong media tycoon Jimmy Lai, was arrested under China’s new national security law on Monday, while U.S. health chief Alex Azar visited Taiwan on Sunday - a trip condemned by China which claims the island as its own. Senior U.S. and Chinese officials will meet via teleconference on August 15 to review the implementation of their Phase 1 trade deal and likely air mutual grievances. Overnight data showed China’s industrial activity picked up in July, boosting hopes for an economic recovery and driving early gains in European stocks. The Norwegian crown gained versus the dollar, up around 0.1% at 9.0430. The New Zealand dollar was down 0.2% versus the dollar, at 0.6588. The Australian dollar was subdued, down 0.1% versus the U.S. dollar at 0.71525, after the country recorded a record-high daily increase in COVID-19 deaths on Monday. Prime Minister Scott Morrison said internal border closures were unlikely to be lifted before Christmas. Australia’s central bank downgraded its outlook for the national economy on Friday and warned unemployment would stay high for several years.