Rupee ended higher, Dollar lower vs. major currencies

Wednesday,   20-Jan-2021   04:06 PM (IST)

The Indian rupee ended the session higher at 73.03/04 levels compared to its opening at 73.11/12 levels after touching the high of 73.01/02 levels tracking a broad dollar decline amid a firm risk appetite in the region. Rupee traded in the range of 73.01-73.1450 levels today. Apart from the positive risk appetite, equity-related inflows remain supportive of the rupee, albeit to a lesser extent than in the previous instances.  Indian federal government bond yields settled largely unchanged as traders were in a wait-and-watch mood ahead of the central bank’s open market operation due tomorrow. An upbeat mood in the global markets, ahead of the swearing-in of Joe Biden as the 46th President of the United States, catapulted benchmark indices to fresh record highs on Wednesday. The S&P BSE Sensex settled at 49,792 levels, up 394 points or 0.8 per cent. Nifty50 ended with gains of 123.5 points, or 0.85 per cent, at 14,645. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.18%, 4.86% and 4.78% respectively.

The dollar sank against a basket of currencies for a third straight session on Wednesday as improved sentiment buoyed riskier currencies such as the Aussie dollar and the euro. The Australian dollar was the biggest mover in the G10 group of currencies, gaining half a percent to $0.7734. The New Zealand dollar was a close second, up 0.35% at $0.7140. Ebbing political turmoil in Italy, with Prime Minister Giuseppe Conte winning a crucial vote to stay in power, helped lift the euro to $1.2158, already buoyant on a survey that showed improving investor sentiment in Germany. the world will be watching Joe Biden's inauguration as U.S. President at noon in Washington (1700 GMT), traders were more focused on his policies than the ceremony. U.S. Treasury Secretary nominee Janet Yellen urged lawmakers to "act big" on stimulus spending at her confirmation hearing and said she believes in market-determined exchange rates, without expressing a view on the dollar's direction. The index that measures the dollar's strength against a basket of peers was down 0.1% at 90.390. While the dollar has perked up in recent weeks on the back of a rise in U.S. Treasury yields, investors still expect the currency to weaken. Positioning data shows investors overwhelmingly short dollars as they figure budget and current account deficits will weigh on the greenback. Sterling traded 0.2% higher to the dollar at $1.3668, up for a third straight day.