Rupee ended steady, Dollar lower vs. major currencies

Friday,   20-May-2022   04:02 PM (IST)

The Indian rupee ended the session little changed at 77.5475/5575 levels compared to its opening at 77.51/52 levels after touching the high of 77.50/51 levels as data showing more signs of weakness in the U.S. economy boosted appetite for global risk assets. Rupee traded in the range of 77.50-77.61 levels today. A rise in regional currencies, led by China cutting the key policy rate for mortgages, and Indonesia lifting an export ban on palm oil also boosted the risk-on sentiment for the local currency. Asian shares were broadly higher. Indian federal government bond yields stayed higher as market participants awaited the result of a weekly debt auction. The S&P BSE Sensex jumped 1,534 points, or 2.91 per cent, to end at 54,326, while the Nifty50 closed at 16,266, up 457 points or 2.89 per cent. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.38%, 3.46% and 3.60% respectively.

The U.S. dollar was headed for its worst week since early February versus major peers on Friday, as some of the heat faded from the currency’s breakneck 10% surge. The greenback has been supported by a flight to safety by investors, amid a rout across markets due to fears of the impact of soaring inflation and Russia’s invasion of Ukraine. But after rising in all but two of the last 14 weeks, the dollar index was on track for a 1.5% weekly fall on Friday. The index, which tracks the dollar against six major rivals, was broadly flat on the day at 102.92. Last Friday, it had soared to the highest since January 2003 at 105.01. A recent build-up of long U.S. dollar positions could help extend the pullback, the note added. Other safe-haven currencies have rallied this week as global stocks have come under pressure. The Swiss franc was on track for a nearly 3% weekly gain versus the dollar, while the Japanese yen was set for an almost 1% weekly gain. The Swiss franc was last broadly flat at 0.97350 franc, while the yen was down 0.2% at 128.205 yen. The euro has also benefitted from the dollar’s weakness, and was on track for a weekly gain of 1.5%. It was last down 0.1% on the day at $1.05755. Sterling was set for its biggest weekly gain since December 2020, and was flat on the day at $1.2480.