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Rupee ended higher, Australian Dollar and Euro up

Tuesday,   24-Nov-2020   04:11 PM (IST)

The Indian rupee ended the session higher at 74.0050/0150 levels compared to its opening at 74.11/12 levels after touching the high of 73.8675/8725 levels aided by an upbeat risk appetite in the region and local equities hitting new highs. However, state-run banks’ dollar purchases, likely on behalf of the Reserve Bank of India, capped large gains in the local unit. Rupee traded in the range of 73.8675-74.11 levels today. Indian sovereign bond yields ended marginally lower as the central bank announced the auction of a new 10-year bond this week, which will lead to realignment of the yield curve.  Continuing their gaining streak, the benchmark indices ended 1 per cent higher on Tuesday amid across-the-board buying.  The S&P BSE Sensex rallied 446 points, or 1 per cent to settle at a fresh closing high of 44,523 levels. During the day, the index hit a high of 44,601.63 levels. On similar lines, NSE's Nifty breached the psychological level of 13,000 to settle at 13,055, up 129 points, or 1 per cent. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.69%, 3.48% and 4.13% respectively.

Risk-oriented currencies including the Australian dollar and the euro rose on Tuesday after U.S. President Donald Trump accepted the start of a transition to a Biden regime, that may include former Federal Reserve Chair Janet Yellen as Treasury secretary. The New Zealand dollar was among the major gainers, rising as much as 0.9% to a two-year high of $0.6985, after the country’s government sought advice from the central bank on how it could help stabilise property prices, prompting investors to unwind some bets of more monetary easing. Trump gave the head of the General Services Administration the go-ahead to proceed with a transition to a government led by President-elect Joe Biden despite plans to continue with legal challenges. Democratic allies to the Biden campaign said Yellen is expected to be nominated to become Treasury Secretary, heartening investors as she has called for increased government spending to lift the economy out of a coronavirus induced recession. Yellen has called for the opening of fiscal spending taps to revive an economy wrecked by the coronavirus pandemic and would be the first person to head the Treasury, the Fed and the White House Council of Economic Advisers. In contrast, U.S. Treasury Secretary Steven Mnuchin last week let some of the Fed’s lending programmes expire at the end of this year, opening a feud with the central bank, which said those emergency facilities are important to support the economy. Against a basket of other major currencies, the greenback edged 0.12% lower to 92.396, hovering just above a near three-month low of 92.013 hit on Monday. The Australian dollar ticked up 0.4% to $0.7313 while the euro rose 0.1% at $1.1852. The dollar also struggled after AstraZeneca further lifted investors’ appetite for risk by saying its COVID-19 vaccine could be about 90% effective and it would prepare to submit data to authorities around the world that have a framework for conditional or early approval.