Indian Rupee Fell 0.9% Against The Dollar This Week

Indian Rupee Fell 0.9% Against The Dollar This Week

24 Apr 2021 02:08 PM

Weekly Synopsis

Indian Rupee

The Indian rupee fell against the U.S. currency this week, as an unabated surge in coronavirus cases raised fears of continued economic distress and foreign equity outflows. However, dollar sales by state-run banks throughout the week, likely for the Reserve Bank of India, along with exporter covering capped large-scale losses in the domestic unit. For the week, rupee fell 0.9% and closed this week at 75.01.

India's foreign exchange reserves rose to $582.41 billion as of April 16, compared with $581.21 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 Markets

The dollar fell against major currencies on Friday as U.S. yields languished and the euro got an extra late-day lift following an earlier boost from an upbeat survey of purchasing managers. For the week, Dollar index fell 0.7% and closed at 90.82 against the previous week close of 91.52.

Sales of new U.S. single-family homes rebounded more than expected in March, likely boosted by an acute shortage of previously owned houses on the market. The Commerce Department said on Friday that new home sales surged 20.7% to a seasonally adjusted annual rate of 1.021 million units last month.

U.S. factory activity powered ahead in early April, Data firm IHS Markit said its flash U.S. manufacturing PMI increased to 60.6 in the first half of this month. That was the highest reading since the series started in May 2007 and followed 59.1 in March. Economists polled had forecast the index rising to 60.5 in early April.

The number of Americans filing new claims for unemployment benefits fell to a 13-month low last week, Initial claims for state unemployment benefits decreased 39,000 to a seasonally adjusted 547,000 for the week ended April 17, the lowest since mid-March 2020, the Labor Department said. Economists polled had forecast 617,000 applications for the latest week.

The euro zone's recovery from its pandemic-induced economic downturn was much stronger than expected in April as the service industry adapted to lockdowns and made a surprise return to growth, a survey showed. A PMI for the dominant service industry rose to 50.3 from last month's 49.6, beating the median forecast in the Reuters poll for a decline to 49.1.

Britain's unemployment rate unexpectedly fell for a second month in a row to 4.9% in the December-to-February period, Economists polled had largely forecast that the jobless rate - which has been held down by the government's huge jobs subsidies programme - would edge up to 5.1% from 5.0% in the three months to January.

Japan’s manufacturing activity expanded for a third month in April while a contraction in the service sector continued amid a fresh wave of coronavirus infections. The au Jibun Bank Japan’s purchasing managers index for manufacturing sector activity rose 0.6 point to 53.3, while its measure of service sector activity was unchanged at 48.3.

China's exports to North Korea in March rose to a six-month high, with outbound shipments to its neighbour that month nearly 400 times more than January-February combined, in a sign of easing border restrictions imposed due to COVID-19. China exported $12.978 million of goods to North Korea in March, up from $3,000 in February and $33,000 in the first two months.

Local Markets

Indian equities closed lower on Friday to record weekly losses, as an unrelenting surge in COVID-19 cases and deaths deepened fears of further economic pain from the pandemic. The indexes lost 1.89% and 1.95% for the week, respectively, as the imposition of restrictions in major cities threatened to derail a nascent economic recovery.   

Foreign investors sold net $120.69 million of Indian shares on Apr. 22, according to data from the National Securities Depository Ltd. In April so far, these investors sold net $914.17 million of Indian shares.