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Rupee ended lower, Pound falls vs. Dollar

Thursday,   10-Jun-2021   04:17 PM (IST)

The Indian rupee ended the session lower at 73.0525/0625 levels compared to its opening at 72.96/97 levels after touching the low of 73.1250/1350 levels on broad dollar strength ahead of keenly awaited inflation data in the U.S. that could alter the Federal Reserve’s policy outlook. Rupee traded in the range of 72.94-73.1250 levels today. The local unit has fallen by an aggregate of 0.3% in the last three trading sessions amid importers taking advantage of the fall in premiums and the spot rate along with corporate dollar demand. Asian currencies and equities were mostly higher ahead of the data. Indian federal government bond yields settled marginally lower, while benchmark note largely unchanged for the second consecutive session as traders awaited the details of the central bank’s upcoming debt purchase. Benchmark indices ended higher led by broad-based buying, amid weekly options expiry. The S&P BSE Sensex ended at 52,300, up 359 points, or 0.69 per cent, while the Nifty50 closed the session at 15,738-mark, up 102 points, or 0.65 per cent. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.89%, 4.14% and 4.34% respectively.

Sterling fell to a one month low versus the dollar on Thursday after Britain and the European Union failed to agree on solutions to post-Brexit trade problems in Northern Ireland. The UK and the EU exchanged threats this week in a standoff that could cloud a weekend international summit hosted by Britain. The British currency took a hit after the European Commission Vice President Maros Sefcovic said on Wednesday that the EU was considering advancing its legal challenge to Britain over UK action in Northern Ireland, which could result in a court case by autumn or the eventual imposition of tariffs and quotas. Brussels accuses London of failing to implement checks on some goods moving from Britain to Northern Ireland and has started legal action over the British government’s unilateral extension of a grace period. The row has been dubbed the “sausage war” by British media because it affects the movement of chilled meats. British Prime Minister Boris Johnson then said he was optimistic over talks with the EU on smoothing trade with Northern Ireland, adding that the dispute would not overshadow the upcoming Group of Seven (G7) leaders summit. But sterling continued to fall on Thursday, touching its lowest level versus the dollar since May 14 of $1.4074 in early London trading. By 0845 GMT, it was 0.2% lower at $1.4084 versus the greenback. Versus the euro, the pound was 0.1% lower at 86.41 pence, touching a ten-day low against the single currency. Analysts said that the rising number of COVID cases was also adding pressure on the pound, as it could delay further steps to fully reopen the British economy. U.S. President Joe Biden, ahead of his first meeting with Johnson, urged Britain to avoid imperiling the delicate peace in Northern Ireland. On his first trip abroad since taking office in January, Biden will meet Johnson on Thursday in the English seaside resort of Carbis Bay ahead of the Friday-Sunday G7 summit.