Rupee ended almost flat, Euro higher vs. Dollar
Tuesday,
19-Jan-2021
04:15 PM (IST)
The Indian rupee ended the session almost flat at 73.1650/1750 compared to its opening at 73.15/16 levels after touching the high of 73.14/15 levels tracking a pullback on the dollar index amid a rebound in regional equities and currencies. The rupee had fallen to an intraday low of 73.31 earlier in the session on the back of dollar demand from importers. Rupee traded in the range of 73.14-73.31 levels today. Asian currencies rebounded from yesterday’s losses and were trading 0.1% to 0.3% higher. Indian federal government bond yields fell for a second consecutive session as traders expect the central bank to continue buying bonds in the weeks ahead. Indian shares rose today as heavyweights Reliance and Housing Development Finance Corp provided a boost, with investors eyeing upbeat global cues ahead of a new presidency under U.S. President-elect Joe Biden. Sensex closed with gains of 834 points, or 1.7 per cent, at 49,398.29 levels. The Nifty50 reclaimed the 14,500-mark and closed at 14,521 levels, up 239.85 points or 1.68 per cent. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.34%, 4.76% and 4.69% respectively.
EUR/USD has been extending its gains, recapturing 1.21 as the market mood improves. The German ZEW figures are set to show optimism about the future despite the current crisis. Treasury Secretary nominee Janet Yellen's testimony is awaited. GBP/USD is edging above 1.36 as markets eagerly Treasury Secretary nominee Janet Yellen's testimony. The UK parliament is set to process the Brexit deal as Britain ramps up its vaccination campaign. The dollar dropped on Tuesday as investors prepared for U.S. Treasury Secretary nominee Janet Yellen to talk up the need for major fiscal stimulus and commit to a market-determined exchange rate when she testifies later in the day. The fall in the greenback came after a 2% rise in the dollar so far in 2021, a gain which caught off guard many investors who had betted on a further dollar decline following its weakness in 2020. The dollar has been helped in January by rising U.S. Treasury yields and some investor caution about the strength of the global economy recovery from the coronavirus pandemic. But most analysts are sticking with their calls for a weaker greenback from here. President-elect Joe Biden has unveiled plans for a $1.9 trillion fiscal stimulus package. The Wall Street Journal on Monday reported Yellen, who is appearing at the Senate Finance Committee, will affirm a more traditional commitment to market-set currency rates in a Senate testimony on Tuesday. is in stark contrast to outgoing President Donald Trump, who often railed against dollar strength.
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