Rupee Gained 0.1% This Week

Rupee Gained 0.1% This Week

07 Nov 2020 01:34 PM

Weekly Synopsis

 Indian Rupee

The Indian rupee rose against the U.S. currency for a fourth straight week, with choppy moves on the dollar index amid uncertainty over the outcome of the U.S. Presidential election. The rupee gained 0.1% this week, after gaining by an aggregate of 1.4% in the last three weeks. The local unit saw some volatility during the week, traded in a wide 73.88 to 74.87 band and closed this week at 74.20.

India's foreign exchange reserves rose for the fifth straight week to hit a fresh record high of $560.72 billion for the week ending Oct. 30, from $560.53 billion in the prior week, Foreign currency assets rose to $518.34 billion from $517.52 billion in the previous week, according to the data.

Global Market

The dollar sank to its lowest level in over two months against a basket of peer currencies on Friday, as vote counting for the contentious U.S. elections slowly moved toward a divided government and investors predicted more losses for the currency. The dollar index fell against a basket of six major currencies to 92.235, hitting its lowest level since Sept. 2. For the week, the dollar index was down as much as 1.9%, on course for its biggest drop since March. 

U.S. wholesale inventories were higher than initially estimated in September as sales barely rose, government data showed on Friday. The Commerce Department said wholesale inventories gained 0.4% in September, instead of dipping 0.1% as estimated last month.

The U.S. economy created a net 638,000 nonfarm jobs in the month through mid-October, in a stronger-than-expected start to a quarter that looks set to be overshadowed by the spreading Covid-19 pandemic. Nonfarm payrolls had been expected to rise by 600,000. As such the actual number represents only a modest slowdown in job creation from an upwardly-revised 672,000 in September. 

The number of Americans filing initial claims for state jobless benefits last week fell by less than expected to 751,000, in a further sign of the pressure on the labor market as a fresh wave of Covid-19 infections hits the U.S. economy. Economists had expected a drop to 732,000. Last week's figure was revised upwards by a little under 1% to 758,000, according to Labor Department data released on Thursday.

German industrial output rose by less than expected in September as the coronavirus crisis held back activity, data showed on Friday, suggesting Europe's largest economy may not have the strength of avoid a double dip. Industrial output increased by 1.6% on the month, figures released by the Federal Statistics Office showed. A Reuters poll had forecast a rise of 2.7%.

U.K. house prices climbed the most since 2016 last month, pushing average values to a record ahead of the renewed restrictions to contain coronavirus. Average house prices rose 7.5% in October from a year earlier to a record average of 250,457 pounds ($329,000), mortgage lender Halifax said Friday. On the month alone, prices gained 0.3%.

Britain's construction sector lost momentum in October but suffered less than the most of the coronavirus-hit economy thanks to a buoyant housing market, a business survey showed on Thursday.The IHS Markit/CIPS Purchasing Managers' Index for the construction sector dropped to 53.1 in October from September's 56.8, a bigger drop than the decline to 55.0 which economists had forecast in a Reuters poll, and its lowest since May.

China exports grew at the fastest pace in 19 months in October, while imports also rose, official data showed on Saturday, as the world's second largest economy continued to recover after being hit hard by the coronavirus crisis earlier this year. Exports in October rose 11.4% from a year earlier, beating analysts' expectations of a 9.3% increase and quickening from a solid 9.9% increase in September.

Japan's household spending slumped in September from a year earlier and real wages slid for the seventh straight month, data showed on Friday, a sign sluggish domestic demand will continue to drag on any recovery in the world's third-largest economy. Household spending fell 10.2% in September from a year earlier, marking the fourth biggest drop on record and roughly matching a median market forecast for a 10.7% fall, government data showed. It followed a 6.9% drop in August.

Local Market

Indian shares closed at their highest level since mid-January on Friday, boosted by gains in Reliance Industries after the country's most valuable company secured more funding for its retail business. Both the indexes gained more than 5% this week, their best weekly performance since June. Nifty50 Closed this week at 12,263 against the previous week close of 11,642.

Foreign investors bought net $727.52 million worth of Indian shares on Nov. 5, according to data from the National Securities Depository Ltd. So far in November, these investors bought shares worth net $1.07 billion.