Indian Rupee Appreciated 1.3% this week (26th April - 30th April)

Indian Rupee Appreciated 1.3% this week (26th April - 30th April)

01 May 2021 01:15 PM

Weekly Synopsis

 Indian Rupee

The Indian rupee logged its worst month in over a year against the U.S. currency due to the central bank’s quantitative easing plan and as a resurgence of virus cases in the country fuelled worries that an economic recovery may be delayed. For the week, the domestic unit rose 1.3%, its biggest weekly rise since Aug. 28 and ended this week at 74.06 against the previous week close of 75.01.

India's foreign exchange reserves rose for the third consecutive week to $584.11 billion on Apr. 23 from $582.41 billion in the previous week, the Reserve Bank of India said. Foreign currency assets climbed to $541.65 billion from $540.59 billion in the prior week, while gold assets rose marginally to $35.97 billion from $35.35 billion.

Global Market

The dollar rose on Friday, extending gains after upbeat data on personal income, spending, and manufacturing in the U.S. Midwest, with market participants also taking profits on the currency's short dollar positions this month. For the week, Dollar index was up by 0.5% and closed this week at 91.28 compare to the previous week close of 90.82.

The U.S. economy strengthened in the first quarter of 2021, as Covid-19-related lockdowns started to ease, allowing a partial recovery to take hold. Government data released on Thursday showed gross domestic product grew at an annualized rate of 6.4% in the first quarter, up from 4.3% in the fourth quarter of 2020 and faster than consensus forecasts of a 6.1% rate.

U.S. consumer confidence jumped to a 14-month high in April as increased vaccinations against COVID-19 and additional fiscal stimulus allowed for more services businesses to reopen, boosting demand and hiring by companies. The Conference Board's consumer confidence index raced to a reading of 121.7 this month. That was the highest level since February 2020, Economists polled by Reuters had forecast the index would increase to a reading of 113.0 in April.

New orders for key U.S.-made capital goods rose solidly in March and shipments surged, Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, increased 0.9% last month.

The euro zone economy shrank less than expected in the first three months of the year, preliminary data showed on Friday, The European Union's statistics office Eurostat said gross domestic product in the 19 countries sharing the euro contracted 0.6% quarter-on-quarter for a 1.8% year-on-year fall. Economists polled had expected a 0.8% quarterly and a 2.0% annual decline.

British retailers reported the sharpest upturn in sales since 2018 this month as non-essential began to reopen after months of closure, adding to signs of an economic rebound as COVID restrictions ease, a survey showed on Tuesday. The Confederation of British Industry said its monthly retail sales volume balance jumped to +20 in April from -45 in March, its highest level since September 2018.

Japan's factory activity expanded in April at the fastest pace since early 2018 on a global demand recovery, a private sector survey showed on Friday, The final au Jibun Bank Japan Manufacturing Purchasing Managers' Index (PMI) rose to a seasonally adjusted 53.6 in April, its most robust expansion since February 2018.

China's factory activity in April expanded at the fastest pace in four months on stronger demand, The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) rose to 51.9 in April from an 11-month low of 50.6 in March, beating analyst expectations for a smaller uptick to 50.8.

Local Market

Indian shares snapped a four-day winning streak on Friday, driven lower by financial and consumer goods stocks,The NSE Nifty 50 index fell 1.77% to 14,631.1, while the benchmark S&P BSE Sensex shed 1.98% to close at 48,782.36. The indexes, however, gained 2.0% and 1.9% over the week as upbeat corporate earnings reports buoyed sentiment.

Foreign investors bought net $194.74 million of Indian shares on Apr. 29, according to data from the National Securities Depository Ltd. In April so far, these investors sold net $1.04 billion of Indian shares.