Rupee ended flat, Pound higher vs. Dollar

Monday,   10-May-2021   04:13 PM (IST)

The Indian rupee ended the session flat at 73.35/36 levels compared to its opening at 73.35/36 levels after touching the high of 73.3375/3475 levels tracking broad losses on the dollar after weaker-than-expected U.S. jobs data raised bets that the Federal Reserve will maintain its current level of bond purchases for longer. Rupee however, fell to an intraday low of 73.48 on dollar bids by state-run banks, likely for the Reserve Bank of India. Rupee traded in the range of 73.3375-73.48 levels today. India’s federal government bond yields settled little changed at the start of the week as traders awaited details of the central bank’s next debt purchase even as the country's Covid-19 crisis showed no signs of abating. Domestic equity indices started gap-up and remained park near day's high level for better part of the day. The benchmark S&P BSE Sensex closed at 49,502 levels, up 296 points or 0.6 per cent. The 50-share index closed at 14,942 levels, up 119 points or 0.8 per cent. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 5.03%, 5.39% and 5.23% respectively.

The pound broke above the key $1.40 level for the first time in more than two months on Monday, reaching as high as $1.40725 in early London trading, despite a win for pro-independence parties in Scottish elections. Pro-independence parties won a majority in Scotland’s parliament on Saturday, paving the way for a high-stakes political, legal and constitutional battle with British Prime Minister Boris Johnson over the future of the United Kingdom. But the pound strengthened as market participants did not interpret this as a near-term risk and welcomed the fact that Scottish leader Nicola Sturgeon said that her first task was to deal with the COVID-19 pandemic. Any second referendum on Scottish independence requires the approval of the UK government and Prime Minister Boris Johnson has ruled this out, saying the country needs to focus on more pressing concerns such as the recovery from the pandemic. Analysts said the move in cable was due more to dollar weakness, as the greenback dropped to a two-month low after a disappointing U.S. employment report. The Bank of England said Britain’s economy would grow by the most since World War Two this year and slowed the pace of its trillion dollar bond-purchasing programme, but stressed it was not reversing its stimulus.