Sep 23 2017

Rupee logs worst week since Nov post Fed

 Weekly Synopsis

 

Date:- 23rd September 2017

 

Markets from 18th September 2017 to 22nd September 2017:-

 

Indian Rupee:-

 

  • The Indian rupee posted its steepest weekly decline in 10 months against the dollar, as the U.S. central bank prepares to raise rates further and unwind its balance sheet at a time when investors are worried about New Delhi’s fiscal consolidation path. On a weekly basis, the currency fell 1.12%, its biggest weekly decline since the week ended Nov. 18, 2016. The rupee closes on Friday at 64.79 against the previous weekly close of 64.0725 on September 15th, 2017 to a greenback. It trades in a broad weekly range between 63.9975 to 65.16 against the greenback.

 

  • India’s federal government is likely to announce a fiscal stimulus package of around 400 billion rupees to boost economic growth, television channel ET Now reported quoting sources. The government expects a revenue shortfall of 500 billion rupees this year.

 

  • India’s foreign exchange reserves rose for a fourth consecutive week to another record high of $402.51 billion as of Sep.15, from $400.73 billion in the previous week, the central bank said on Friday. The increase was driven by a rise in foreign currency assets to $378.01 billion from $376.21 billion in the previous week, according to the data from the Reserve Bank of India.

 

Global Market:-

 

  • The dollar remained roughly unchanged against a basket of major currencies on Friday amid an uptick in safe-haven demand as U.S.-North Korea tensions resurfaced but sterling weakness curbed downside momentum in the greenback. The S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.01% to 91.98.

 

  • North Korea said on Friday it might test a hydrogen bomb over the Pacific Ocean as the ongoing war of words between President Donald Trump and his North Korean counterpart Kim Jong un continued after latter vowed to make a “mentally deranged” Trump pay dearly for an earlier threat to “totally destroy” North Korea if it threatened America or its allies. In the wake of Kim Jong un’s comments, traditional safe-haven currencies like the yen and Swiss franc made strong gains the greenback. USD/JPYfell to Y112.09, down 0.34% while USD/CHF fell to 0.9697 down 0.11%.

 

  • Losses in the greenback, however, were curbed by a slump in sterling following an update from British Prime Minister Theresa May on Brexit negotiations on Friday. In her speech, Mrs May proposed that Britain stay in the EU’s single market for a two-year “period of implementation” to smooth the Brexit process. GBP/USDfell 0.43% to $1.3523. EUR/USD tacked on 0.04% to $1.1946.

 

  • The U.S. central bank kept the policy rates unchanged on Wednesday, as was widely expected, but announced that the authority would begin to reduce from October its approximately $4.2 trillion in holdings of U.S. Treasury bonds and mortgage-backed securities that it had accumulated to ease the 2008 credit crisis. The authority also signaled one more rate hike later this year. Fed Chair Janet Yellen’s remarks on weak inflation in the world’s largest economy. The authority also slightly reduced their inflation target for 2017 and 2018, while maintain the 2% target for 2020.

 

  • The S&P 500 closed slightly higher on Friday even though Apple was a drag, as worries about Washington’s latest healthcare legislation proposal eased and investors shrugged off concerns about North Korea. The Dow Jones Industrial Average fell 9.64 points, or 0.04 percent, to 22,349.59, the S&P 500 gained 1.62 points, or 0.06 percent, to 2,502.22 and the Nasdaq Composite added 4.23 points, or 0.07 percent, to 6,426.92.

 

  • European markets finished mixed as of the most recent closing prices. The FTSE 100 gained 0.64%, while Germany’s DAX was off 0.06%. Shares in France were unchanged with the CAC 40 at 5,213.91.

 

Local Market:-

 

  • Indian shares ended lower for a fourth straight session on Friday, weighed down by banking stocks, as the government’s plan for $7.7 billion stimulus spending raised concerns over fiscal deficit.

 

  • The broader NSE index closed down 1.56 percent at 9,964.40, while the benchmark BSE index fell 1.38 percent to 31,922.44. Both indexes posted their biggest intraday percentage decline in 10 months.

 

  • The NSE index lost 1.22 percent this week, while the BSE index fell 1.09 percent. Both indexes posted weekly losses for a second time this month.