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Rupee ended tad lower, Pound higher vs. Dollar

Thursday,   26-Nov-2020   04:06 PM (IST)

The Indian rupee ended the session a tad lower at 73.8850/8950 levels compared to its opening at 73.8250/8350 levels after touching the low of 73.90/91 levels as state-run banks’ dollar purchases, likely at the behest of the central bank, countered the impact of positive regional cues and a broad dollar decline. Rupee traded in the range of 73.76-73.90 levels. Rupee hit a one-month high of 73.76 earlier in the session, but pared gains on dollar buying by three large state-run banks, likely for the Reserve Bank of India. Indian sovereign bond yields ended marginally lower after the central bank purchased debt via a so-called special open market operation, while the market now awaits the sale of the new 10-year bond at the weekly debt auction tomorrow. Staging a smart recovery, the domestic equity market ended around 1 per cent higher on Thursday, the last day of the futures and options (F&O) contracts for the November series, amid broad-based buying. The S&P BSE Sensex surged 432 points, or 0.98 per cent to settle at 44,260 levels and the Nifty50 index gained 129 points, or 1 per cent to 12,987 levels. India VIX, meanwhile, dropped nearly 13.5 per cent to 20 levels. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.29%, 3.42% and 4.13% respectively.

Sterling held near three-month high on Thursday as broadening U.S. dollar weakness offset some of the uncertainty over the outcome of Brexit talks. Traders are looking for progress on a trade deal between Britain and the European Union. A successful deal is priced in, but fears persist that the discussions could break down. The head of the EU’s executive Commission on Wednesday reported “genuine progress” but said the risk of Britain leaving the EU without a deal on Dec. 31 remained. Sterling, in common with British stocks, has largely shrugged off finance minister Rishi Sunak’s unprecedented spending plans announced on Wednesday, as Britain looks to borrow some 400 billion pounds ($534.68 billion) to pay for the novel coronavirus’s hit to the economy. Sunak said on Thursday he was confident a trade deal could be struck. With just five weeks left until the United Kingdom exits the EU, both sides are trying to reach a trade deal that would avoid a tumultuous finale to the Brexit crisis.The pound was down 0.14% at $1.3364 in early London trading after hitting an early September high of $1.3399 in Asian trading. It slid slightly against the euro to 89.1 pence. With a lack of major scheduled news on Thursday, sterling traders will be watching for any official or unofficial news on the Brexit talks, traders said, with negative signals likely driving bigger price swings because a positive outcome is expected.