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Rupee ended higher, Pound higher vs. Dollar

Monday,   23-Nov-2020   04:05 PM (IST)

The Indian rupee ended the session higher at 74.10/11 levels compared to its opening at 74.13/14 levels after touching the high of 74.0425/0525 levels as regional risk sentiment firmed up on growing hopes of an early rollout of coronavirus vaccines. However, bets that the Reserve Bank of India will not allow the local unit to breach 74 levels limited its upside, traders said. The rupee was little changed for most part of today’s session, but dollar sales by a large private bank led to some gains. Rupee traded in the range of 74.0425-74.2250 levels. Indian sovereign bond yields ended marginally higher after weak demand for duration papers at the government's debt switch today, while traders awaited fresh triggers in coming sessions. The S&P BSE Sensex gained 195 points, or 0.44 per cent to settle at 44,077 levels while NSE's Nifty ended at 12,926, up 67 points, or 0.52 per cent. During the day, the index hit a record high of 12,969 levels. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.21%, 3.45% and 4.10% respectively.

Sterling rallied on Monday as more positive news about a potential COVID-19 vaccine propelled investors to buy riskier currencies and offset concerns about whether Britain and the European Union can clinch a Brexit trade deal. London and Brussels this week continue their negotiations to agree a deal on their future trading relationship, though time is now running very short as Britain’s post-Brexit transition period ends in fewer than six weeks. Without an agreement Britain would revert to trading with the EU on World Trade Organisation rules, an outcome both sides believe would prove highly disruptive for their economies. Most investors believe a deal will be clinched, even if it is a bare-bones one that leaves some trade discussions for later. Such optimism has kept sterling supported and news on Monday that Britain’s AstraZeneca vaccine for the novel coronavirus could be around 90% effective without any serious side effects added to the positive mood and pushed the pound to 2-1/2 months highs. The British currency rose 0.7% to as high as $1.3382, while against the euro it rose 0.6% to 88.75 pence, a near two-week high. In a busy week for the UK, Finance Minister Rishi Sunak will unveil his spending review on Wednesday. He vowed over the weekend that there would be no return to austerity, even as the coronavirus crisis pushes Britain’s debt further above 2 trillion pounds.