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India Rupee Up As Foreign Banks’ Dollar Sales Trigger Stop Losses

Wednesday,   18-Nov-2020   01:31 PM (IST)

The Indian rupee was trading higher against the U.S. currency, as foreign banks' dollar sales, likely for their custodian clients, prompted sporadic culling of long positions on the greenback. The rupee was quoting at 74.19 to the dollar compared with 74.46 in the previous session. The rupee hit a one-week high of 74.10/11 earlier in the session. Despite the broadly constructive cues and a barrage of foreign portfolio inflows, the rupee has not managed to rally in recent sessions. The currency is down from 74.10 in October, despite almost $5.5 billion of foreign fund inflows into Indian equities that are currently near record highs. Asian cues, too, have been positive and the dollar index is not far from its more-than two-year lows. Meanwhile, Asian stocks and currencies were mixed after U.S. shares retreated from record highs overnight amid disappointing U.S retail sales. Headline retail sales in the world's largest economy rose 0.3% month-on-month in October compared with the 0.5% expected by economists polled by Reuters. The lackluster October retail sales indicated that the U.S. economic recovery may be losing momentum amid the lack of fiscal stimulus and surging coronavirus infections.  Federal Reserve Chair Jerome Powell yesterday once again warned that the rising number of infections posed a threat to the U.S. economy and will weigh on consumer spending. He repeated the call for more fiscal stimulus, saying that risks persisted despite progress on the vaccine.