Rupee ended lower, Pound steady vs. Dollar

Friday,   14-Aug-2020   02:43 PM (IST)

The Indian rupee ended the session lower at 74.90/91 levels compared to its opening at 74.85/86 levels after touching the low of 74.9350/9450 levels tracking the fall in domestic shares. Rupee traded in the range of 74.74-74.9350 levels today with traders now watching out for the U.S. July retail sales and industrial output data, due later today. Asian currencies and equities were broadly mixed. Regional currencies were also under pressure as the 10-year Treasury yield climbed to a near-two-month high after the number of Americans filing for weekly unemployment benefits fell to below a million for the first time since the virus outbreak in the U.S. India’s wholesale prices contracted for the fourth straight month through July, but the pace eased from the previous month as food prices turned higher, government data showed today. Wholesale prices contracted 0.58% on year in July. It eased from 1.81% fall in June. India's federal government bond yields were higher in the afternoon session, as an above-expected inflation print dented bets of policy rate cuts in the coming months. Equity markets registered a sharp decline in Friday's afternoon session to slip into the red. At 2:06 PM, the S&P BSE Sensex was trading at 37,943 down 368 point, while the broader Nifty50 was at 11,182 down 118 point. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.44%, 3.63% and 3.74% respectively.

The pound was steady on Friday as thin August trading kept investors on the sidelines. Sterling was last flat at $1.3067 and at 90.35 pence against the euro. It has risen nearly 7% in the last three months against the U.S. dollar, almost exclusively on the back of the greenback weakening. Borrowing costs in Europe have tracked U.S. Treasuries this week, which have been driven to new highs by a deluge of debt issuance in the United States. Next week, Britain releases inflation data on Wednesday and retail sales on Friday, with both expected to be lower. Coronavirus cases are rising in some parts of the world, which has prompted the British government to impose quarantine on many tourists returning from holidays. Late on Thursday, it announced that it would require arrivals from France, the Netherlands and Malta to quarantine from 0300 GMT on Saturday because infection rates there were too high, dealing a new blow to the travel industry. The UK can ill afford another coronavirus-induced slump after posting a 20% drop in second-quarter GDP. In October it is due to end a furlough scheme that has allowed millions to retain their jobs. Prime Minister Boris Johnson has ordered the reopening of the economy in England to resume, saying a rise in infections that prompted caution two weeks ago had now levelled off, and warned of harsher punishment for those who breach the remaining restrictions.