Rupee ended higher, Dollar steady vs. major currencies

Wednesday,   10-Aug-2022   04:07 PM (IST)

The Indian rupee ended the session higher at 79.52/53 levels compared to its opening at 79.56/57 levels after touching the high of 79.41/42 levels tracking easing crude oil prices and foreign fund inflows. Rupee traded in the range of 79.41-79.60 levels today. The high cost of carrying long USD/INR positions through an extended weekend helped rupee outperform the Asia FX market. Asian currencies were trading mostly lower ahead of the key U.S. inflation data. Indian government bond yields eased on Wednesday, after rising for the last two sessions, as traders looked to cover short positions heading into key U.S. inflation data. Domestic equities stayed range-bound below the flat line today as lack of domestic triggers kept investors on the sidelines. The S&P BSE Sensex closed 36 points, or 0.06%, lower at 58,817, while the Nifty50 shut shop at 17,535, up 10 points or 0.06%. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 3.11%, 3.00% and 2.89% respectively.

Major currencies held steady on Wednesday, with traders cautious about placing large bets ahead of U.S. inflation data, which markets will scrutinise for guidance on how steeply the U.S. Federal Reserve will raise interest rates in coming months. The figures are due at 1230 GMT. Economists expect year-on-year headline inflation to be running at a scorching 8.7%, a small retreat from June's whopping 9.1% figure. Core inflation is expected at 0.5% month-on-month. The greenback was broadly steady, having paused a bit from a retreat that began in the middle of July. It bought 135 Japanese yen and sat at $1.0230 per euro and $1.2091 versus sterling, all little changed on the day and largely unchanged since the start of this week. A quick reading on policymakers' reaction may come from Fed officials Charles Evans and Neel Kashkari, who are due to make speeches at 1500 GMT and 1800 GMT, though they will have another set of price data in August before September's policy meeting. The Australian and New Zealand dollars were also calm, with the Aussie last at $0.6972. Chinese inflation data on Wednesday showed a small increase in annual consumer inflation, to 2.7%, and a slowdown in factory-gate price growth. In offshore trade, the Yuan lost a little ground to 6.762 per dollar.