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India Rupee At 1-Wk High On Steps Announced Post MPC Rate Cut

7 February 2019 / Evening Brief

Indian Rupee

  • The rupee settled at 71.45 against 71.5525 at the previous close. The local unit moved in 71.30-71.76 per dollar band intra-day.
  • The Indian rupee recouped early losses to end at a near-one week high against the dollar, after the nation’s rate-setting panel unexpectedly cut its key policy interest rate that lifted local assets, while announcing steps to boost dollar inflows. Rupee reacted positively to the policy outcome because rate cut is beneficial to the local stock market and corporates, which helps in bringing in foreign inflows in the country. Limit for FPI’s and relaxation of the use of ECB proceeds too helped the local currency. The RBI’s reserves numbers also suggest that it is restocking after the recent fall in the reserves.

Global Currency

  • The euro fell to a two-week low on Thursday after the European Commission sharply cut its forecasts for economic growth in the euro zone. Complicating the European Central Bank's plans for an interest rate hike this year and weakening the single currency. The euro has lost around 1.3 percent over the last week as investors bet the ECB will keep monetary policy accommodative faced by low inflation in the single currency area.
  • Sterling GBP was marginally lower at $1.2914. Pound has weakened by 1.3 percent in February due to Brexit woes. The UK is on course to leave the EU on March 29 without a deal unless British PM Theresa May can convince the bloc to reopen the divorce agreement.

Global Markets

  • Oil steadied on Thursday as growing expectations that global supply could fall significantly short of demand this year lent support, offsetting the negative impact of a rise in U.S. inventories.
  • Gold was trading close to a more than one-week low on Thursday weighed by a stronger dollar but uncertainties around the Sino-U.S. trade spat and concerns about slowing global growth supported the metal above the key $1,300 level.

Global Markets at one Glance

Markets at 5.00pm In INR % Change
USD/INR 71.46 71.46 -0.15
EUR/USD 1.13292 80.97 -0.42
GBP/USD 1.28954 92.08 -0.46
USD/JPY 109.829 0.65 -0.03
SEK/INR 9.2525 7.7233 -0.0488
DKK/INR 6.366 11.2250 0.49
AUD/USD 1.4077 -0.46
DXY 96.643 0.26
Index Today % Change
NIFTY 11069.4 0.06
SENSEX 36971.09 -0.01
NIKKEI 20751.28 -0.59
HANG SENG 27990.21 0.21
SHANGHAI 2618.2323 1.3
CAC# 5044.07 -0.69
FTSE # 7264.61 0.0042
DAX # 11173.48 -1.34
Commodities Today % Change
GOLD # 1306.7 0.07
SILVER# 15.69 0.22
BRENT # 62.42 -0.43
NYMEX # 53.64 -0.69
Today Today
OPEN 71.7275
HIGH 71.7600
LOW 71.3000
CLOSE 71.4500

Key Events of the Day

Date Time Currency Event Actual Forecast Previous
07-Feb-19 11.45 INR Interest Rate Decision 6.25% 6.50% 6.50%
07-Feb-19 11.45 INR Reverse REPO Rate 6.00% 6.25% 6.25%
07-Feb-19 11.45 INR Cash Reserve Ratio 4.00% 4.00% 4.00%

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