Rupee ended higher, Pound higher vs. Dollar

Tuesday,   12-Jan-2021   04:12 PM (IST)

The Indian rupee ended the session higher at 73.2550/2650 levels compared to its opening at 73.4225/4325 levels after touching the high of 73.25/26 levels as inflows in local shares outweighed the impact of a further rebound in the dollar index and the U.S. Treasury yields. Rupee fell to the day’s low of 73.4450/4550 levels earlier in the session, but recouped losses on dollar sales by two large foreign banks on behalf of their client. Rupee traded in the range of 73.25-73.4450 levels today. India’s sovereign bond yields ended largely unchanged after rising yesterday, as traders awaited the retail inflation print for December, due later today. Indian shares closed at another record high on Tuesday, driven by gains in heavyweights Reliance Industries and HDFC Bank as investors looked past a central bank report that warned of rising bad loans among the country's lenders. The S&P BSE Sensex settled 248 points, or 0.5 per cent, higher at 49,517.11 levels. The Nifty50 closed above the 14,550-mark, at 14,563.45, up 79 points or 0.5 per cent. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.09%, 4.40% and 4.56% respectively.

GBP/USD trades close to 1.3600 after BOE's Bailey downplayed negative rate expectations, by calling it a controversial issue. The cable also remains buoyed by an increase in the UK's vaccination campaign and tentative signs of the disease peaking in London.  EUR/USD has bounced from the lows and is hovering around 1.2150 amid calmer markets. US yields remain elevated as the Fed mulls tapering bond buying. Coronavirus developments are eyed. The US dollar is off the highs and markets have stabilized after a risk-off day on Monday. US bond yields remain high ahead of a speech by the Fed's Brainard. Coronavirus statistics remain dire yet vaccinations in the UK have been ramped up. Cryptocurrencies are bouncing after a massive crash on Monday. US ten-year Treasury yields have been stabilizing at around 1.15% after continuing their climb on Monday. The relative calm allows the greenback to retreat.