Rupee logged its first weekly rise in 4 weeks

Rupee logged its first weekly rise in 4 weeks

25 Oct 2019 05:57 PM

Weekly Synopsis


Indian Rupee

Indian rupee logged its first weekly rise in four weeks against the dollar, on custodian dollar inflows and improved risk appetite amid signs of progress in the U.S.-China trade talks. The local unit appreciated 0.4% this week, after registering a decline of 0.8% in the last three weeks. The pair USDINR closes at 70.88 against the previous weekly close of 71.14 on October 18th, 2019 to a greenback. It trades in a weekly range between 71.08 to 70.76 against the dollar.

India's foreign exchange reserves rose for a fourth straight week to hit a record high of $440.75 billion as of the week ended Oct. 18, from $439.71 billion at the end of the prior week, according to central bank data released today. The gain was mainly due to increase in foreign currency assets that climbed to $408.81 billion from $407.88 billion in the previous week, the data showed.

Global Market

The dollar index, which measures the greenback against a basket of developed market peers, was flat at 97.66. The focus will shift next week to a U.S. Federal Reserve meeting ending Oct. 30 and a Bank of Japan meeting ending Oct. 31. The Fed is expected to cut interest rates for a third time this year, but money markets have largely priced in a 25 basis points cut already.

Sales of new U.S. single-family homes fell in September as low inventories continue to weigh on sales even as prices saw the biggest monthly fall in five years. The Commerce Department said on Thursday new home sales declined 0.7% to a seasonally adjusted annual rate of 701,000 units last month, matching expectations. August's sales pace was revised down to 706,000 units from the previously reported 713,000 units.

The number of Americans filing applications for unemployment benefits unexpectedly fell last week. Initial claims for state unemployment benefits declined 6,000 to a seasonally adjusted 212,000 for the week ended Oct. 19, the Labor Department said on Thursday. Data for the prior week was upwardly revised to 218,000.

The euro-area economy stayed at the brink of contraction as manufacturing shrank for a ninth month. IHS Markit’s Composite Purchasing Managers’ Index rose to 50.2 in October, missing economist estimates of 50.3. The reading above 50 -- a level that divides expansion from contraction -- signals that the private sector in the euro area is barely growing at the start of the fourth quarter.

Japan’s factory activity fell to the lowest level in three years, adding to concerns over the impact of a delayed pickup in the global economy as the Bank of Japan concludes a review on the economy and inflation next week. The Jibun Bank Manufacturing Purchasing Managers Index fell to 48.5 in October, the lowest level since June 2016.

U.S. home sales fell more than expected in September as the market continues to struggle with a dearth of properties for sale, especially for cheaper homes. The National Association of Realtors said on Tuesday that existing home sales fell 2.2% to a seasonally adjusted annual rate of 5.38 million units last month, reversing two straight months of gains. August's sales pace was upwardly revised to 5.50 million units.

Germany's seasonally adjusted budget surplus was 1.7% of the country's GDP in the second quarter, down from 2.0% in the previous three months, data from the European Union's statistics office Eurostat showed on Tuesday.

New home prices in China grew at a steady pace in September. Average new home prices in China's 70 major cities rose 0.5% in September from August, when it also grew at the same pace -the slowest since February, calculation based on National Bureau of Statistics (NBS) data on Monday.

Oil prices steadied on Friday and were on track for strong weekly gains as support from a surprise draw in U.S. inventories and possible action from OPEC and its allies to extend output cuts outweighed broader economic concerns. Brent crude was down a marginal 2 cents at $61.65 but the benchmark was set for a weekly gain of nearly 4%. West Texas Intermediate (WTI) crude was down 9 cents at $56.14 and on track for a gain of more than 4% over the week.

Local Market

Indian shares eked out minor gains on Friday ahead of a local holiday, as a rally in State Bank of India (SBI) after it posted strong quarterly profit helped indexes stay in positive region. The broader NSE index ended 0.01% higher at 11,582.60, while the benchmark BSE closed up 0.1% at 39,058.06. For the week, both NSE and BSE closed over half a percent lower. The Nifty PSU Bank index, which tracks the country's state-owned lenders, settled 3.38% higher, up for a second straight week.

Shares in State Bank of India rose as much 8.2% before settling 7.6% higher - their best day in over a month - after the nation's largest lender by assets reported a three-fold rise in September-quarter profit. Tata Motors Ltd finished the session 5.43% lower as investors await quarterly results from the car maker. Bharti Infratel Ltd was the top percentage loser on the NSE index, crashing nearly 9% to hit a five and half year low.