Indian Rupee Depreciated 0.8% this week

Indian Rupee Depreciated 0.8% this week

03 Apr 2021 02:38 PM

Weekly Synopsis

 Indian Rupee

The Indian rupee emerged unscathed from coronavirus woes to record its best-ever performance for a decade in this fiscal year against the U.S. currency, gaining strength from robust investment and portfolio inflows and broad dollar losses. Rupee closed 0.8% lower this week at 73.10 compare to the previous week close of 72.51.

India's foreign exchange reservesfell to $579.29 billion as of March 26, compared with $582.27 billion a week earlier, the Reserve Bank of India said on Friday. Changes in foreign currency assets, expressed in dollar terms, include the effect of appreciation or depreciation of other currencies held in its reserves.

Global Market

The dollar rose on Friday in thin trading, posting its third straight weekly gain, after data showed the world's largest economy created more jobs than expected in March, suggesting it is on a steady path to recovery from the pandemic. For the week, dollar index was up by 0.3% and closed at 92.98.

A measure of U.S. manufacturing activity soared to its highest level in more than 37 years in March, driven by strong growth in new orders, the clearest sign yet that a much anticipated economic boom was probably underway. The Institute for Supply Management (ISM) said on Thursday its index of national factory activity jumped to a reading of 64.7 last month from 60.8 in February. 

The number of people filing initial claims for jobless benefits rose unexpectedly last week, signaling that the improvement in labor market trends remains uneven despite the reopening of large swathes of the economy. The Labor Department said 714,000 people filed initial jobless claims last week, up from 658,000 the previous week.

U.S. private employers hired the most workers in six months in March as more Americans got vaccinated against COVID-19, Private payrolls surged by 517,000 jobs this month after rising 176,000 in February. Economists polled by Reuters had forecast private payrolls increasing by 550,000 jobs in March.

German factory activity grew at the fastest pace on record in March, a survey showed on Thursday - although the container ship that blocked the Suez Canal last week may delay raw materials arrivals and prolong supplier delivery times. IHS Markit's Final Purchasing Managers' Index (PMI) for manufacturing, which accounts for about a fifth of the economy, reached 66.6, matching the record flash reading achieved thanks to a surge in demand from the United States and China.

Britain's coronavirus-hammered economy grew more quickly than previously thought in the final three months of last year but still shrank by the most in more than three centuries in 2020 as a whole, official data showed on Wednesday. Gross domestic product increased by 1.3% between October and December last year from the previous three-month period, the Office for National Statistics said.

Japan's factory output fell in February as an earthquake and semiconductor shortage led to declines in the production of cars and electrical machinery, adding to worries for an economy struggling to recover from the coronavirus pandemic. Official data released on Wednesday showed factory output shrank 2.1% from the previous month in February, dragged down by falls in production of cars, electrical machinery and information and communication equipment.

China's manufacturing activity expanded at the quickest pace in three months in March as factories cranked up production after a brief lull during the Lunar New Year holidays, with improving global demand adding further momentum to a solid economic recovery. The official manufacturing Purchasing Manager's Index (PMI) rose to 51.9 from 50.6 in February, data from the National Bureau of Statistics (NBS) showed on Wednesday.

Local Market

Gains in metal and auto stocks helped Indian shares rise more than 1% on Thursday, while capital infusion by the government in some state-run lenders lifted public-sector banks. For the week, sensex was up by 2.08% and closed this week at 50,029.83 against the previous week close of 49.008.50.

Foreign investors bought net $230.19 million of Indian government and corporate bonds on Mar. 31, according to NewsRise calculations based on data from Clearing Corp of India Ltd. and National Securities Depository Ltd. In March, these investors sold net $465.15 million of Indian debt.