Indian Rupee Rose 0.7% This Week

Indian Rupee Rose 0.7% This Week

08 May 2021 11:54 AM

Weekly Synopsis

 Indian Rupee

The Indian rupee recorded a second straight weekly rise against the U.S. currency, as near-term forward premiums eased, while a fall in the dollar index further aided gains. On Friday, the rupee rose 0.3%, its biggest single-session rise in over a week, propped up by an upbeat risk mood in the region. For the week, it rose 0.7%, adding to last week’s 1.3% climb and closed this week at 73.51.

India's foreign exchange reserves rose to $588.02 billion as of April 30, compared with $584.11 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 fell to its lowest in more than two months on Friday after U.S. jobs data for April came in well below expectations, putting a damper on hopes that a roaring economic recovery would spur higher rates and light a fire under the greenback. For the week index was down by 1.12% and closed this week at 90.25 against the previous week close of 91.28.

The U.S. economy created far fewer jobs in April than estimated, casting doubt over the strength of the economic recovery.  The Labor Department said only 266,000 net nonfarm payrolls were added through the middle of last month, compared to expectations for a number just under 1 million. In addition, the March payrolls gain was revised down by a whopping 146,000 to 770,000.

The number of Americans filing new claims for unemployment benefits fell below 500,000 last week for the first since the COVID-19 pandemic started more than a year ago, signaling the labor market recovery had entered a new phase amid a booming economy.

U.S. services industry activity grew at a slightly slower pace in April, likely restrained by shortages of inputs amid a burst of demand that is being driven by massive fiscal stimulus and a rapidly improving public health environment. The Institute for Supply Management (ISM) said on Wednesday its non-manufacturing activity index fell to a reading of 62.7 last month from 63.7 in March, which was the highest on record.

Euro zone factory activity growth surged to a record high in April, boosted by burgeoning demand and driving a rise in hiring, IHS Markit's final Manufacturing Purchasing Managers' Index (PMI) rose to 62.9 in April from March's 62.5, albeit below the initial 63.3 "flash" estimate but the highest reading since the survey began in June 1997.

Britain's services sector recorded its fastest growth in more than seven years last month as hospitality businesses and retailers began to reopen to the public after months of lockdown. IHS Markit said its monthly Purchasing Managers' Index for the services sector rose to 61.0 in April from 56.3 in March, above an earlier flash estimate of 60.1.

China’s services activities expanded at their highest speed in four months in April, with a little help from a huge trade surplus. Data released earlier on Friday said that the Caixin Services Purchasing Managers Index (PMI) for April was 56.3, higher than March’s 54.3 reading.

Local Market

Indian shares closed the week on a strong note on Friday, The NSE Nifty 50 index closed at 14,823.15, while the benchmark S&P BSE Sensex ended this week at 49,206.47. The indexes closed the week 1.3% and 0.9% higher, respectively, registering their second straight week of gains.

Foreign investors bought net $146.93 million of Indian shares on May 6, according to data from the National Securities Depository Ltd. In May so far, these investors sold net $376.25 million of Indian shares.