Indian Rupee Fell 0.1% this week

Indian Rupee Fell 0.1% this week

12 Jun 2021 11:59 AM

Weekly Synopsis

 Indian Rupee

The Indian rupee was marginally lower against the U.S. currency this week amid broad focus on corporate dollar demand. For the week, it fell by 0.1%, adding to last week’s 0.8% fall. Rupee closed this week at 73.07 against the previous week close of 72.9950.

India's foreign exchange reserves rose to $605.01 billion as of June 4, compared with $598.17 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 euro and sterling dipped against the dollar on Friday as investors bet interest rates would stay lower for longer in Europe and Britain while looking ahead to next week's U.S. monetary policy meeting. The dollar index showed its strongest weekly gain since early May and was up by 0.4% this week.

U.S. consumer sentiment rebounded in early June as inflation fears subsided and households grew more optimistic about future economic growth and employment, The University of Michigan said its preliminary consumer sentiment index increased to 86.4 in the first half of this month from a final reading of 82.9 in May. Economists polled had forecast the index rising to 84.

Applications for U.S. state unemployment insurance fell for a sixth straight week, consistent with further improvement in the labor market and robust economic growth. Initial claims in regular state programs decreased by 9,000 to 376,000 in the week ended June 5, Labor Department data showed Thursday.

U.S. wholesale inventories increased strongly in April as businesses replenished stocks to meet pent-up demand, The Commerce Department said on Wednesday that wholesale inventories rose 0.8% as estimated last month. Stocks at wholesalers advanced 1.2% in March. Wholesale inventories increased 5.2% in April from a year earlier.

Britain's recovery from the COVID-19 pandemic sped up in April as lockdown measures eased, with the fastest monthly growth since July leaving output a record 27.6% higher than a year earlier, when the virus was rampant and lockdown tightest. Economic output rose by 2.3% month-on-month in April, marking the fastest growth since July, the ONS ( Office for National Statistics) said.

German exports rose in April, prompted by increasing trade with the United States, suggesting a continued recovery in Europe's biggest economy. Seasonally adjusted exports increased by 0.3% on the month after an upwardly revised rise of 1.3% in March, the Federal Statistics Office said on Wednesday.

China's May factory gate prices rose at their fastest annual pace in over 12 years due to surging commodity prices, China's producer price index (PPI) increased 9.0%, the National Bureau of Statistics (NBS) said on Wednesday, as prices bounced back from last year's pandemic lows. Analysts had expected the PPI to rise 8.5% after a 6.8% increase in April.

Japan's wholesale prices rose at their fastest annual pace in 13 years reflecting higher commodity costs, data showed on Thursday, The corporate goods price index (CGPI), which measures the prices companies charge each other for their goods, rose 4.9% in May from a year earlier, Bank of Japan data showed on Thursday, more than a median market forecast for a 4.5% increase.

Local Market

Indian shares ended at a record high on Friday, gaining for a fourth consecutive week as more states eased pandemic restrictions, with investors seeming confident that high U.S. inflation was transitory. For the week, Nifty50 Index was up by 0.8% and ended this week at 15,799.35.

Foreign investors bought net $197.61 million of Indian shares on Jun. 10, according to data from the National Securities Depository Ltd. In June so far, these investors bought net $1.42 billion of Indian shares.