Oct 12 2018

Indian rupee posted its first weekly rise in seven weeks against the dollar

Weekly Synopsis

12th October, 2018

Market From 08 October 2018 To 12 October 2018

Indian Rupee:-

  • Indian rupee is closed higher by 56 paise at 73.56 per dollar. It has opened higher at 73.83 per dollar versus previous close 74.12.Yesterday the rupee ended higher by 8 paise after it plunged to all-time low of 74.48 per dollar during the intraday trade.
  • Crude oil prices and the greenback weakening versus other major currencies provided some relief to Indian rupee.

  • On the domestic front, government is expected to take further steps to increase import duties on various products to curb a ballooning current-account deficit and falling rupee.

  • On the other hand, RBI is also intervening to curb the volatility of the currency.RBI has changed its tack in its foreign exchange intervention policy, increasing its participation in the derivatives market in relation to the spot market in an apparent attempt to avoid a cash crunch in the banking system.

  • India yesterday raised basic customs duty on imports of a host of communication equipment by 10% to 20%, effective today. This was the second such increase in less than a month.

Local Markets:-

  • Bulls make a comeback and how! After the drubbing seen on Thursday, where indices lost over 2 percent in a single session, equity benchmarks reversed almost all of those losses and saw a strong end to the week.

  • Indian shares jumped over 2% on Friday, the most since late May 2016, with a stronger rupee and an overnight fall in crude prices bringing some relief after the previous session’s sharp sell-off. The benchmark BSE index rose 2.15% to 34,733.58, and closed the week 1 percent higher.The broader NSE index climbed 2.32% to 10,472.50, ending the week 1.5% higher.

Global Markets:-

  • The dollar crept up on Friday, reflecting investor confidence in the U.S. economy. The dollar index (DXY), a gauge of its value against six major currencies, traded flat at 95 on Friday, down from its monthly high of 96.15 on Tuesday.

  • U.S. consumer prices rose less than expected in September. The Consumer Price Index increased 0.1 percent last month after rising 0.2 percent in August, the Labour Department said. In the 12 months through September, the CPI increased 2.3 percent.

  • The number of Americans filing for unemployment benefits unexpectedly rose last week but remained near a 49-year low. Initial claims for state unemployment benefits increased 7,000 to a seasonally adjusted 214,000 for the week ended Oct. 6, the Labour Department said on Thursday.

  • U.S. producer prices rose in September, according to data released on Wednesday. The Labor Department said its producer price index (PPI) increased 0.2% last month. In the 12 months through September, the PPI rose 2.6%.

  • The UK economy rebounded in the three months to August, according to data released on Wednesday. The Office of National Statistics said the economy grew 0.7% in the three months to August, picking up from the 0.6% expansion seen in the three months to July.

  • Investor morale in the euro zone fell more than expected in October. Sentix’s index for the euro zone fell to 11.4 from 12 points in September. The Reuters consensus forecast was for a dip to 11.7. A sub-index measuring expectations rose slightly to -8.3 from -8.8. A sub-index on current conditions fell to 33 from 35, hitting its lowest level since April 2017.

  • Venezuelan consumer prices rose 488,865 percent in the 12 months ending in September, Daily inflation is now 4 percent, according to opposition legislator Angel Alvarado, with monthly inflation rising to 233 percent in September from 223 percent in August. In an effort to stabilize prices, President Nicolas Maduro in August cut five zeros off the ailing bolivar currency, boosted the minimum wage by 3,000 percent.

  • China’s vast export engine unexpectedly kicked into higher gear in September, producing a record trade surplus with the United States. September exports rose 14.5 percent from a year earlier, the fastest pace since February, the customs data showed. That was well above August’s 9.8 percent and a Reuters poll forecast of 8.9 percent