Rupee ended lower, Pound edges up vs. Dollar

Wednesday,   09-Jun-2021   04:07 PM (IST)

The Indian rupee ended the session lower at 72.9750/9850 levels compared to its opening at 72.91/92 levels after touching the low of 73.0225/0325 levels amid dollar demand from corporates and weak equities. Rupee traded in the range of 72.8850-73.0225 levels today. Indian federal government bond yields settled largely unchanged in a thinly-traded session as investors awaited fresh cues, including details of next week’s debt purchase. Asian shares ended lower. The Indian benchmark indices fell over half a per cent lower on Wednesday, dragged mainly by sell-off in public sector banks and auto stocks in the second half. The S&P BSE Sensex ended at 51,942, down 334 points or 0.64 per cent while the Nifty50 closed the session at 15,635-mark, down 105 points or 0.67 per cent. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.95%, 4.02% and 4.23% respectively.

The pound edged up against the dollar and euro in early London trading on Wednesday, shrugging off post-Brexit trade issues over Northern Ireland, while market participants looked ahead to the European Central Bank meeting and U.S. CPI data on Thursday. Currency markets have been generally sluggish so far this week ahead of the two events on Thursday which are expected to be market-moving. Currently, sterling was up versus the dollar, at $1.4173, having traded in a tight range since mid-May. Versus the euro, it was up 0.1% at 85.97 pence per euro. Sterling-dollar implied volatility gauges with one-month maturities were at their lowest since February 2020, suggesting that market participants are not bracing for significant price-action.  Britain’s Brexit minister, David Frost, is meeting European Commission Vice President Maros Sefcovic in London on Wednesday to try to resolve the differences over trading arrangements in Northern Ireland. Brussels accuses London of breaking the agreement by failing to implement checks on some goods moving from Britain to its province of Northern Ireland, and has started legal action over the British government’s unilateral extension of a grace period. So far, months of talks have done little to break the deadlock, and Britain said on Tuesday that it would tell the European Union that time is running out to find solutions. U.S. President Joe Biden will depart on Wednesday for Britain, where he will participate in the G7 summit. He will have a meeting with British Prime Minister Boris Johnson on Thursday.