Rupee ended lower, Pound rose vs. Dollar

Monday,   12-Apr-2021   04:12 PM (IST)

The Indian rupee ended the session lower at 75.06/07 levels compared to its opening at 74.96/97 levels after touching the low of 75.1375/1475 levels as a relentless rise in local coronavirus cases intensified fears of a delay in economic recovery. Rupee traded in the range of 74.7550-75.1375 levels today. Rupee briefly touched the high of 74.7550/7650 levels today on foreign banks’ dollar sales, likely for their clients. Traders said that equities and the rupee were pricing in more stringent lockdowns in Maharashtra, which has already imposed a total weekend lockdown and a night curfew. The decision on whether more measures are needed will be likely discussed on Wednesday, according to the state's health minister. Nomura revised its India’s fiscal year 2022 growth forecast to 12.6% from 13.5% earlier, saying they expect a weaker sequential momentum in the current quarter amid lockdowns. Last week, Goldman Sachs had revised its current quarter and annual projections lower. India’s federal government bond yields ended largely unchanged at the start of the week as investors stayed on the sidelines amid a worrying spike in Covid-19 cases that pushed stocks and the rupee lower. Among the headline indices, the benchmark S&P BSE Sensex plunged nearly 1,900 points while the Nifty50 cracked about 590 points in the intra-day deals to hit lows of 47,693 and 14,249, respectively. At close, the headline indices were 3.5 per cent lower each at 47,883 levels and 14,311 level, down 1,708 points and 524 points, respectively. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 4.37%, 4.49% and 4.54% respectively. Traders now await the release of the retail inflation print for March, due post-market hours today, to assess how long India’s monetary policy can stay accommodative in the wake of the Covid surge.

The pound rose on Monday, recovering partly after a weekly loss, while CFTC data showed that speculators’ net long positions fell to a nine-week low as market participants split over the outlook for the UK economy. The UK’s vaccine rollout - one of the fastest in the world - helped the pound have its best quarter since 2015 in the first three months of 2021. That trend reversed last week, with sterling suffering a net 2.1% weekly loss against the euro - a move which market participants said was amplified by a squeeze of euro-pound short positions. Speculators’ net long position on the pound versus the dollar shrank in the week to April 6, weekly futures data from CFTC showed. The market has been net bullish on the pound since early December 2020, but the latest data put levels of bullishness at its lowest since February. At 0726 GMT, the pound was at 86.595 pence per euro, up 0.3% on the day but still weaker than when it hit a one-year high of 84.720 this time last week. Against the dollar, the pound was up around 0.2% at $1.3742.