Rupee ended almost flat, Pound up vs. Dollar
Thursday,
19-May-2022
04:01 PM (IST)
The Indian rupee ended the session almost flat at 77.7250/7350 levels compared to its opening at 77.72/73 levels. Rupee had declined as low as 77.7450/7550 levels in early trade today in line with a broader global selloff, on signs of a surge in inflation threat the world over, even as the impact of the Ukraine war and the recent resurgence of Covid-19 cases in China dampened optimism about the pace of economic growth. Rupee traded in the range of 77.6350-77.7450 levels today. Major regional currencies were mostly weaker to steady. India’s central bank will remain resolute and committed towards bringing inflation back closer to the target through all possible tools at its disposal, the Reserve Bank of India Governor Shaktikanta Das said in the minutes of the off-cycle meeting of the rate-setting Monetary Policy Committee earlier this month. The minutes were released by the RBI after market hours yesterday. Asian equities broadly weakened, with the exception of China’s market, following a selloff on Wall Street, as retailer Target Corp lost a quarter of its stock market value after a plunge in first-quarter earnings and a guidance of a bigger margin hit on rising fuel and freight costs. Indian federal government bond yields ended lower tracking similar moves in U.S. Treasury yields, even as the minutes of the Monetary Policy Committee's latest meeting raised bets that rate hikes would likely be frontloaded. India’s key BSE Sensex equity index plunged about 2.6% today, the biggest single-day fall since March 7. The S&P BSE Sensex crashed 1,416 points to end at 52,792. The NSE Nifty50 closed at 15,809 after it shed 431 points or 2.65 per cent. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.34%, 3.48% and 3.54% respectively.
Britain’s pound inched up against the dollar on Thursday, but stayed clear of recent two-week highs as soaring inflation combined with a murky growth outlook prevented a stronger rebound. However, the currency stayed off highs of $1.25 seen earlier this week, having tumbled on Wednesday after data showed UK inflation rising to a 40-year record and concerns flared about a sharp economic slowdown given the pain inflicted on consumers. An easing in the safe-haven dollar aided the pound’s recovery, with the market awaiting British April retail sales data on Friday for fresh direction. The euro edged up on Thursday as investors price in the chance of an aggressive near-term tightening path by the European Central Bank, while the safe-haven dollar took a breather after significant gains in the previous sessions. Money markets are currently pricing in 106 basis points (bps) of ECB rate hikes from around 95 bps on Tuesday before ECB official Klaas Knot signalled a 50-basis-point rate increase was possible in July.
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