Indian Rupee Rose 0.1% This Week (18th Jan - 22nd Jan)

Indian Rupee Rose 0.1% This Week (18th Jan - 22nd Jan)

23 Jan 2021 11:39 AM

Weekly Synopsis


The Indian rupee rose for the second straight week against the U.S. currency, aided by portfolio inflows and a broad dollar decline. The rupee rose 0.1% this week, adding to last week's 0.2% rise and closed this week at  72.98 compare to the previous eek close of 73.07.

India's foreign exchange reserves fell to $584.24 billion as of Jan 15, compared with $586.08 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 drifted higher on Friday after three straight days of losses, and riskier currencies fell, as bleak non-U.S. economic data gave global equity markets reason to pause after another week of record highs. The dollar index posted its biggest weekly loss since mid-December , index was down by 0.6% this week and closed at 90.22 against the previous week close of 90.76.

The number of people claiming jobless benefits in the U.S. fell last week but remained at historically high levels as the Covid-19 pandemic continued to take its toll. The Labor Department said initial jobless claims fell to 900,000 from 926,000 the week before – a figure that itself was revised downward from an initial estimate of 965,000.

U.S. home sales unexpectedly rose in December, but surging house prices amid record-low inventory could slow the housing market momentum in the coming months. The National Association of Realtors said on Friday that existing home sales increased 0.7% to a seasonally adjusted annual rate of 6.76 million units last month.

Economic activity in the euro zone shrank markedly in January as stringent lockdowns to contain the coronavirus pandemic hit the bloc's dominant service industry hard. IHS Markit's flash composite purchasing managers' index (PMI) for the euro zone, seen as a good guide to economic health, fell further below the 50 mark separating growth from contraction to 47.5 in January from December's 49.1. A Reuters poll had predicted a fall to 47.6.

Britain's relapse into a third national COVID-19 lockdown has sparked the sharpest drop in business activity since May, with services companies hit hardest, a survey showed on Friday. The PMI for the services industry, which accounts for the vast bulk of Britain's private sector economy, fell to 38.8 in January from 49.4 in December, its lowest level since May and marking a third month of contraction.

British inflation gathered speed in December, starting what is expected to be a climb this year as pandemic-fighting measures, Brexit and a recovery in the economy combine to push up costs for consumers and businesses. Consumer prices rose 0.6% in annual terms after a 0.3% increase in November, the Office for National Statistics said.

Japan's core consumer prices slumped in December at the fastest annual pace in a decade,The nationwide core consumer price index (CPI), which includes oil but excludes fresh food costs, fell 1.0% in December from a year earlier, government data showed, slightly less than a median market forecast for a 1.1% drop.

China's economy picked up speed in the fourth quarter,6.6%. Gross domestic product grew 2.3% in 2020, official data showed on Monday, making China the only major economy in the world to avoid a contraction last year as many nations struggled to contain the COVID-19 pandemic.

Local Market

Indian shares ended lower on Friday, slipping from record levels hit in the previous session on weakness in bank and metals stocks, while investors eyed heavyweight Reliance Industries' quarterly results. The Nifty index saw its first weekly drop in four, while the Sensex posted its first weekly drop in twelve. Nifty Index was down by 0.4% this week and managed to close at 14,371.90.

Foreign investors bought net $238.28 million of Indian shares on Jan. 21, according to data from the National Securities Depository Ltd. In January so far, these investors bought net $3.26 billion of Indian shares.