Rupee ended higher, Pound rose vs. Dollar

Thursday,   23-Sep-2021   04:00 PM (IST)

The Indian rupee ended the session higher at 73.6425/6525 levels compared to its opening at 73.78/79 levels after touching the high of 73.6175/6275 levels as regional equities shrugged off the impact of the Federal Reserve hinting at a taper announcement in November and as the dollar index slipped from a one-month high. Rupee traded in the range of 73.6175-73.83 levels. Regional currencies were broadly higher. Most Asia-Pacific stocks rose today. Indian government bonds yields settled largely unchanged today as investors awaited a weekly auction and the borrowing schedule for the fiscal second half. The benchmark BSE Sensex rose 1.6% to a fresh record high, tracking the upbeat risk sentiment. The BSE Sensex jumped 958 points to close at 59,885. Meanwhile, the NSE Nifty settled the day at 17,823, up 276 points. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.47%, 3.57% and 3.84% respectively. 

Sterling rose on Thursday along with most risk currencies as concerns over the Evergrande debt crisis eased and traders waited for the Bank of England meeting and signals for the outlook for policy tightening. The pound had fallen this week as panic that Chinese developer Evergrande would default on its debts sent investors into safer assets and currencies. Attention now turns to the BoE rate decision, due at 1100 GMT. Rate-setters meeting are unlikely to vote for an early end to COVID-19 stimulus, especially after Britain’s economic growth slowed unexpectedly in July and consumer price inflation saw a record jump to a nine-year high. Markets have responded to the inflation numbers by bringing forward rate hike expectations off the record 0.1% low to May 2022. Investors will now be watching closely for any signs that BoE policymakers do not view the rise in price growth quite as transitory after they previously said inflation could temporarily hit 4% by year-end. Some analysts said the U.S. Federal Reserve’s hawkish tone in Wednesday’s policy update has also raised expectations the BoE might not sound as dovish as previously as central banks globally plot a path out of pandemic-era stimulus. The pound was up at $1.3680 and against the euro it was flat at 85.85 pence.