Rupee ended weaker, Dollar higher vs. major currencies

Wednesday,   06-Jul-2022   04:04 PM (IST)

The Indian rupee remained near record lows and ended the session weaker at 79.3025/3125 levels compared to its opening at 79.26/27 levels after touching the low of 79.3675/3775 levels as fears of a global recession hit investor sentiment ahead of the release of the U.S. Federal Reserve's June meeting minutes. Rupee traded in the range of 79.2450-79.3675 levels today. India's benchmark 10-year bond yield dropped to its lowest level in six weeks. Benchmark U.S. Treasury yields tumbled to one-month lows overnight and a key part of the yield curve inverted for the first time in three weeks as economic worries dented risk appetite and increased demand for safe-haven U.S. debt. The BSE Sensex rallied 617 points to close at 53,751. The Nifty50 closed at 15,990, up 179 points or 1.13 per cent. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 2.98%, 2.89% and 2.81% respectively.

The dollar stood tall on Wednesday, holding at a 20-year peak against the euro and multi-month highs against other major peers due to safe-haven demand. The euro edged to a fresh two-decade low against the dollar on Wednesday as fears over rising energy prices and potential shortages cast a long shadow over the bloc's economy despite some reassuring headlines about gas supplies. All oil and gas fields that were affected by a strike in Norway's petroleum sector are expected to be back in full operation within a couple of days, Equinor said on Wednesday. Yen gained a little support from some safety bids after Japanese households' inflation expectations strengthened in the three months to June, with the ratio of homes expecting price rises over the coming year hitting the highest level in 14 years. Bank of Japan has said it would not withdraw monetary stimulus because inflation is due to soaring fuel and raw material costs blamed on the Ukraine crisis and will likely prove temporary. A battered British pound steadied on Wednesday but did not stray far from more than two-year lows against the dollar as British Prime Minister Boris Johnson clung to power after key cabinet members quit unexpectedly. The finance and health secretaries resigned late on Tuesday alongside several others in more junior roles, saying they could no longer stay in government after the latest in a series of scandals blighted the administration.