Rupee ended lower, Dollar edges up vs. major currencies

Tuesday,   29-Sep-2020   03:03 PM (IST)

The Indian rupee ended the session lower at 73.8525/8625 levels compared to its opening at 73.78/79 levels after touching the low of 73.9150/9250 levels weighed down by importers’ month-end greenback demand, ahead of the first U.S. presidential election debate between President Donald Trump and Democrat Joe Biden later today. Equity-related outflows also put some selling pressure on the rupee, traders said. Rupee traded in the range of 73.7650-73.9150 levels. India’s federal government bond yields turned lower as some traders covered short positions ahead of quarter-end, while they also awaited the results of today’s state debt auction. Equity markets fluctuated between gains and losses after making a steady start on Tuesday. At 2:09 pm, the S&P BSE Sensex was trading at 38,002, up 20 point, while the broader Nifty50 was at 11,235 up 8 point. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.64%, 3.73% and 3.83% respectively.

The dollar edged up on Tuesday, still close to 2-month highs, as markets awaited the first debate between the U.S. presidential candidates, signs of progress in U.S. fiscal stimulus talks and economic data, including German inflation. After racking up its biggest weekly gains since early April last week as markets turned cautious and sought safer assets, the dollar erased some losses on Monday and resumed gaining on Tuesday, ahead of the debate between President Donald Trump and Democratic challenger Joe Biden. The 90-minute televised debate at 2100 ET (0100 GMT) will be closely watched by investors for signs as to how the market reacts to perceived victories by either candidate. At 0723, the dollar was at 94.265 against a basket of currencies, up 0.1% on the day. It held steady during a quiet Asian session but picked up as European markets opened. Equity markets opened lower, but riskier currencies held firm, with the New Zealand dollar steady at 0.656 versus the dollar and the Australian dollar up 0.2% on the day at 0.70845. Markets were also waiting for developments in talks over aid for people affected by the coronavirus in the United States. U.S. House of Representatives Speaker Nancy Pelosi said on Monday that Democratic lawmakers were unveiling a new $2.2 trillion fiscal stimulus bill, which she said was a compromise and less costly as it covers a shorter period of time. European Central Bank policymakers are increasingly divided over how to steer Europe’s economy through a second wave of COVID-19 infections. ECB President Christine Lagarde said on Monday that dissent among policymakers is normal. She also said that the governing council will carefully assess developments in the exchange rate.