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Rupee ended lower, Euro edges off lows vs. dollar

Friday,   13-May-2022   04:04 PM (IST)

The Indian rupee ended the session lower at 77.45/46 levels compared to its opening at 77.34/35 levels after touching the low of 77.47/48 levels tracking a fall in domestic shares and due to likely dollar buying by importers. Rupee fell the most this week since early March versus the dollar, amid mounting evidence of a surge in price pressures globally, which raised concern of global investors pulling out funds from risk assets, especially in emerging markets. Rupee moved up to 77.28/29 levels today helped by a rebound in regional equities, while traders assessed the impact of a spike in the local headline inflation last month. Rupee traded in the range of 77.28-77.47 levels today. Indian federal government bond yields were higher as traders awaited the result of a debt auction, while sentiment was dampened after the April inflation print rose to a near-eight-year high, reinforcing bets of aggressive rate hikes ahead. Fag-end selling engulfed the markets on Friday as investors booked profit in banks and metal stocks. With this, the markets ended lower for the sixth straight day despite upbeat global mood. The S&P BSE Sensex ended at 52,794, down 137 points or 0.26 per cent. The Nifty50 closed at 15,782, down 26 points or 0.16 per cent. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.21%, 3.39% and 3.48% respectively.

The euro edged off five-year lows to rise back above $1.04 on Friday, but it is headed for a big weekly loss after Russia's decision to restrict gas supplies to Europe renewed fears about an economic slowdown in the euro zone. The single currency has been battered in recent weeks by a combination of fears for the economy suffering from the fallout of the war in Ukraine, and a huge rally in the dollar fuelled by bets the Federal Reserve will deliver a series of big interest rate hikes to tame inflation. While investors expect the European Central Bank to lift rates out of negative territory this year, yields in the euro zone will lag the United States by a significant margin. On Thursday, the euro dropped to as weak as $1.0354, its lowest since early 2017. It recovered to $1.0413 in early Friday trading but few analysts think the rebound is sustainable. Britain’s pound edged up against the dollar on Friday, offering some respite from a week of selling that pushed the currency to two-year lows.