On a weekly basis Indian Rupee fell 0.3 Pct

On a weekly basis Indian Rupee fell 0.3 Pct

30 Mar 2019 03:02 PM

Weekly Synopsis

Date:- 30th March 2019

Indian Rupee

On a weekly basis, the Indian Rupee fell 0.3%, its biggest weekly decline since week ended on Jan. 18. The rupee closes on Friday at 69.15 against the previous weekly close of 68.95 on March 22nd, 2019 to a greenback. It trades in a weekly range between 68.7675 to 69.3550 against the US Dollar.

Indian rupee posted its steepest decline in five fiscal years against the dollar, as hopes of interest rate hikes by the U.S. Federal Reserve and uncertainty ahead of general elections and widening fiscal gap at home led to foreign fund outflows.

India's foreign exchange reserves rose to $406.67 billion as of the week ended Mar. 22, the highest level since week ended Jul. 22, 2018, and against $405.64 billion at the end of the previous week, according to central bank data released yesterday. The foreign exchange reserves rose for a sixth consecutive week.

India's April-February fiscal deficit touched 8.51 trillion rupees ($123.07 billion), or 134.2 percent of the budgeted target for the current fiscal year, government data showed on Friday.

Global Market

The Dollar inched higher Friday as mostly downbeat economic data did little to drown out the narrative of slowing economic growth. The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.36% to 97.18.

Sales of new U.S. single-family homes jumped to nearly a one-year high in February, even as other housing market figures showed volatility. The Commerce Department said on Friday that new home sales rose 4.9% to a seasonally adjusted annual rate of 667,000 units last month from a revised 636,000 in January.

U.S. personal spending bounced back only weakly in January after a poor end to 2018. The Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.1% in January, following a 0.6% decline in December, its first drop since September 2016.

GDP grew by 1.4% on a year-to-year basis in the final three months of last year. That was an upward revision from the preliminary estimate of 1.3% which had been the weakest growth since the second quarter of 2012. On a quarterly basis, Britain registered meager growth of 0.2%, which was also in line with expectations for no change from the preliminary reading.

Contracts to buy previously-owned homes fell unexpectedly in February, adding a downbeat note to a real estate market plagued by mixed signals. The National Association of Realtors said its pending home sales index, which measures signed contracts for homes where transactions have not yet closed, fell 1.0% to a reading of 101.9.

The number of people who filed for unemployment assistance in the U.S. fell by 5,000 last week to a seasonally adjusted 211,000, the U.S. Department of Labour said. Economists had expected weekly jobless claims to rise by 4,000 to 220,000 from the previous week’s downwardly revised total of 216,000.

The U.S. economy grew less than thought in the fourth quarter, according to data published on Thursday. The third estimate of fourth-quarter gross domestic product (GDP) showed that the economy grew at an annual rate of 2.2%, downwardly revised from a preliminary estimate of 2.6%, and a sharp slowdown from the 3.4% reported in the third quarter of last year.

U.S. trade deficit dropped more than expected in January likely as China boosted purchases of soybeans. The Commerce Department said on Wednesday the trade deficit declined 14.6 percent, the largest decline since March 2018, to $51.1 billion also as softening domestic demand and lower oil prices curbed the import bill.

Confidence among U.S consumers dropped in March towards a 16-month low it hit at the beginning of the year. The Conference Board said Tuesday its consumer confidence index fell to 124.1 in March, below expectations for a reading of 132. That's down from 131.4 in February.

U.S. homebuilding slowed in February after a surge at the beginning of the year. Housing starts tumbled 8.7% to a seasonally-adjusted annual rate of 1.162 million units last month, the Commerce Department said, well below a consensus forecast for 1.213 million units.

German business confidence rebounded by more than expected in March. The Munich-based Ifo economic institute said its business climate index, based on a monthly survey of companies, edged forward to 99.6 from 98.5 in February. February’s reading had been the lowest level since November 2014.

Britain's balance of payments shortfall grew in the last few months of 2018. The difference between money flowing in and out of Britain was negative to the tune of 23.7 billion pounds ($30.9 billion)in the fourth quarter, bigger than a 23.0 billion-pound deficit in the third quarter, the Office for National Statistics said.

British house prices picked up only a little bit of speed this month as the approach of Brexit weighed on the housing market, data from mortgage lender Nationwide showed on Friday. Prices rose by 0.7 percent in annual terms in March, up from a rise of 0.4 percent last month.

U.S. stocks were higher after the close on Friday, as gains in the Healthcare, Technology and Industrials sectors led shares higher. The Dow Jones Industrial Average rose 211.22 points, or 0.82 percent, to 25,928.68, the S&P 500 gained 18.96 points, or 0.67 percent, to 2,834.4 and the Nasdaq Composite added 60.16 points, or 0.78 percent, to 7,729.32.

Oil prices rose as U.S. sanctions against Iran and Venezuela as well as OPEC-led supply cuts overshadowed concerns over a slowing global economy.  U.S. crude settled up 1.4 percent at $60.14 per barrel and Brent settled at $68.39 per barrel, up 0.8 percent.

Local Market

Indian shares settled higher on Friday, posting their best month since March 2016, amid strong foreign fund inflows on expectations that the current coalition government would return for a second term. Foreign investors have bought equities worth a net $4.38 billion this month, the highest since March 2017, after 2018's net outflows of $4.4 billion.

The broader NSE index closed 0.47 percent higher at 11,623.90, while the benchmark BSE index was up 0.33 percent at 38,672.91. For the week, both NSE and BSE ended up over 1 percent each. In March, the NSE index snapped three monthly declines to finish 7.7 percent higher, while BSE index settled 7.82 percent firmer.