Rupee ended almost flat, Euro up vs. Dollar

Tuesday,   17-Nov-2020   04:12 PM (IST)

The Indian rupee ended the session almost flat at 74.4625/4725 levels compared to its opening at 74.45/46 levels after touching the high of 74.37/38 levels as news of another potentially effective coronavirus vaccine prompted bets of a quicker economic recovery, aiding appetite for risk assets. However, state-run banks’ greenback purchases, likely on behalf of the central bank, along with importers’ dollar demand, offset gains, traders said. Rupee traded in the range of 74.37-74.64 levels. Asian currencies and equities rose today after early data released by Moderna revealed that its coronavirus vaccine was about 95% effective. India’s federal government bond yields ended largely unchanged on a lack of fresh triggers. The bulls continued to maintain their firm grip on Tuesday as the benchmark indices settled around 0.7 per cent higher, led by buying in financial counters. The S&P BSE Sensex ended the day at 43,953, up 315 points, or 0.72 per cent while Nifty settled at 12,874, up 94 points, or 0.74 per cent. In the early deals, Sensex briefly touched the crucial 44,000-mark before retreating later. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.44%, 3.45% and 4.03% respectively.

The euro climbed against the dollar on Tuesday, helped by optimism over another coronavirus vaccine, while the Chinese yuan hit its highest against the U.S. currency since June 2018. Europe’s shared currency, however, fell against a broadly stronger pound, which gained on media reports that Britain could reach a post-Brexit trade agreement with the European Union by early next week. Drugmaker Moderna became the second U.S. pharmaceutical company in a week to report positive results from trials of a COVID-19 vaccine, considered necessary to eradicate the pandemic. Last week, encouraging progress in vaccine testing helped the dollar rise against the safe-harbour yen and the Swiss franc. Some of those moves reversed on Tuesday, with the yen gaining back ground against the dollar. Investors in the dollar were looking ahead to the release of U.S. retail sales and industrial production later on Tuesday to gauge the health of the economic recovery. However, policymakers’ response to a record number of coronavirus cases, hospitalisations and deaths in several U.S. states is likely to remain of greater concern. The dollar index against a basket of major currencies stood at 92.431, its lowest in over a week. Sterling edged higher against the dollar and steadied versus the euro on Tuesday as traders awaited news on the progress of trade talks between Britain and the European Union. Britain’s chief negotiator David Frost has told Prime Minister Boris Johnson to expect a Brussels trade deal “early next week”, The Sun reported on Monday, with “a possible landing zone” as soon as next Tuesday, the report said. That had followed news last week that Dominic Cummings, one of the political architects of the Brexit project was set to leave the government, leading some observers to predict a greater chance of a deal. After a brief burst of optimism overnight, however, the pound was marginally higher in early London trading. The pound was up against the dollar at $1.3213, aided by a broad-based weakening of the U.S. currency as COVID-19 cases surge. Versus the euro, the pound was unchanged at 89.820 pence per euro.