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Rupee ended higher, Pound rises vs. Euro and Dollar

Friday,   08-Jan-2021   04:06 PM (IST)

The Indian rupee ended the session higher at 73.24/25 levels compared to its opening at 73.39/40 levels after touching the high of 73.2375/2475 levels on the back of strong local equities. There were also dollar sales by exporters. Rupee had fallen to 73.46/47 levels earlier today, weighed down by importers’ greenback bids and an uptick in the dollar index. Rupee traded in the range of 73.2375-73.46 levels today. Indian federal government bond yields were largely unchanged this week, as a rise in U.S. Treasury yields offset the impact of regular open market operations by the central bank. Earnings optimism and positive global cues fueled a broad-based rally in the markets with benchmark indices settling over a per cent higher on Friday. The S&P BSE Sensex notched 689 points, or 1.43 per cent, to end at fresh closing peak of 48,782.5. The broader Nifty50 too, ended at fresh closing peak of 14,347, closing 210 points or 1.48 per cent higher on the NSE. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.67%, 4.18% and 4.45% respectively.

Sterling gained against a broadly weaker euro on Friday, making up some of the losses it sustained against the shared currency as the new year began, though it was still on track to end the week in the red. Increased market pricing of negative interest rates from the Bank of England following fresh lockdown measures in Britain to combat the coronavirus has dented the pound, capping gains made in the wake of the Brexit deal agreed at the end of last year. Markets are pricing sub-zero rates from Britain’s central bank as early as May 2021. Sterling gained as much as half a percent against the euro to 89.98 pence in early trading in London. It was higher to the dollar at $1.3602. Sterling began 2021 at its highest levels against the dollar since May 2018 after Britain clinched a last-minute trade deal with the EU. Those gains have evaporated fast as Britain grapples with rising cases of COVID-19 amid the discovery of a new strain of the virus. The British economy is also beginning to feel the ramifications of life outside the EU: more than 50 British retailers, including Tesco and Marks & Spencer, face potential tariffs for re-exporting goods to the European Union, their trade body said, amid warnings this could make Britain less competitive. A survey by Deloitte showed a wave of optimism washed over bosses of major British companies in December, ahead of a tightening of COVID-19 restrictions this month, even though many thought it would take a long time to recover fully from the pandemic. Still, half of the respondents said it would take at least until the end of 2021 before revenues return to their pre-pandemic levels - chiming with a Bank of England survey published this week. Britain’s job market strengthened for the first time in three months in December, before a renewed lockdown this month, with an increase in permanent hiring and a small rise in the number of vacancies, a monthly survey of recruiters showed.