Rupee ended almost flat, Dollar slips lower vs. major currencies

Tuesday,   21-Sep-2021   04:00 PM (IST)

The Indian rupee ended the session almost flat at 73.61/62 levels compared to its opening at 73.59/60 levels. Rupee rose to 73.5850/5950 levels today as the dollar index retreated from one-month highs and as the Chinese Yuan recovered from a selloff triggered by concerns over the wider impact of China Evergrande Group’s debt crisis. Rupee traded in the range of 73.5850-73.6925 levels. The rupee, and most Asian currencies, were helped by a sharp pullback on the dollar index. Amid the decline on the dollar index, the offshore Chinese Yuan, the Singapore dollar, and the Malaysian ringgit managed to recover from yesterday's losses. Asian equities closed mixed and U.S. futures advanced following yesterday's selloff. Indian federal government bond yields fell for a second consecutive day as traders expect the benchmark paper to be again included in the central bank's note purchases after this week's buy. After trading on a volatile note for most part of the trading session, the benchmark indices stabilized in the afternoon trade, logging a smart rebound post two-days of selling. The BSE Sensex rose 514 points to end at 59,005. Meanwhile, the 50-pack Nifty closed the day at 17,562, up 165 points. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.76%, 3.61% and 3.87% respectively. 

The U.S. dollar stepped back from a one-month high tested overnight as equity market futures moved higher on Tuesday, while investors, bracing for a potential default by property developer China Evergrande, sought safety in the yen. Default fears continued to stalk China Evergrande Group despite efforts by its chairman to lift confidence in the embattled property company. Financial markets looked for possible intervention by Beijing to stem any domino effects across the global economy. Against a basket of its rivals, the dollar steadied at 93.190 after reaching its highest since Aug. 23 at 93.45 in the previous session. U.S. equity futures were up 1%. As markets stabilised after Monday’s selloff, investors remained broadly cautious. A currency market volatility gauge climbed to its highest levels since end-July. Before Evergrande’s debt crisis unnerved markets, the dollar has been supported ahead of a Federal Reserve meeting this week, where economists in a Reuters poll expect policymakers to signal expectations of a tapering plan to be pushed back to November. The Swiss franc edged higher to 1.0869 per euro, but was still near Monday’s peak of 1.08750. Defying the risk-averse mood, the Australian dollar rallied 0.4% to $0.7278, rebounding with oil prices after dipping to $0.72205 in the previous session for the first time since Aug. 24.