Rupee ended higher, Pound falls vs. dollar

Thursday,   12-May-2022   04:07 PM (IST)

The Indian rupee came off a record low and ended the session higher at 77.4150/4250 levels compared to its opening at 77.50/51 levels after touching the high of 77.38/39 levels as state-run banks sold dollars, suspected on behalf of the Reserve Bank of India. Rupee dropped to touch its historic low of 77.63/64 levels today amid a plunge in most regional peers against the dollar after a higher-than-forecast U.S. headline inflation reading dampened appetite for risk assets. However, suspected intervention from RBI both in the spot and the futures market, limited rupee’s slide. Rupee traded in the range of 77.38-77.63 levels today. Indian federal government bond yields fell amid short-covering and on rumours that the central bank may intervene through bond purchases, while the benchmark yield ended higher ahead of fresh supply tomorrow. India’s benchmark share indices fell tracking a selloff in broader Asian equities. The S&P BSE Sensex closed at 52,930, down 1,158 points. The Nifty50 ended at 15,808, down 359 points. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.42%, 3.56% and 3.65% respectively. Market await India’s consumer inflation data, which is due later today.

Sterling fell to a fresh two-year low versus a strengthening U.S. dollar on Thursday after a slew of economic data pointed to the weakening of the economy. Britain's economy unexpectedly shrank 0.1% in March after a slump in car sales due to supply-chain problems. Data also showed British employers added permanent staff last month at the weakest rate in more than a year suggesting the labour market might be cooling, according to a survey that will be noted by the Bank of England as it assesses inflation pressures. The dollar rose to fresh two-decade highs on Thursday as concerns that tighter monetary policies to tame surging inflation will hurt the global economy dampened risk sentiment and drove investors into the safe-haven currency. Data on Wednesday showed U.S. consumer price growth slowed sharply in April, suggesting that inflation had probably peaked, though it was likely to stay hot. The dollar benefited as the data confirmed expectations for further aggressive hikes in interest rates by the Federal Reserve and investors fretted that central bank tightening could slow global economic growth.