Jul 07 2018

Rupee marked 2nd weekly loss on US-China trade war fears

 Weekly Synopsis

Date:- 07th July 2018

Markets from 02nd July 2018 to 06th July 2018:-

Indian Rupee:-

  • Indian rupee marked its second straight weekly decline against the dollar, tracking weakness in the Chinese yuan after China retaliated to U.S. import tariffs on Chinese goods. On a weekly basis, the currency fell 0.6%, adding to last week’s 0.9% decline. The rupee closes on Friday at 68.8725 against the previous weekly close of 68.4650 on June 29th, 2018 to a greenback. It trades in a weekly range between 69.0250 to 68.33 against the greenback.
  • India’s foreign exchange reserves fell for a third consecutive week to $406.06 billion as of the week ended Jun. 29, from $407.82 billion in the previous week, the central bank said yesterday. The decline was due to a fall in foreign currency assets to $380.72 billion from $382.50 billion in the previous week, according to data from the Reserve Bank of India. Foreign exchange reserves had jumped to a record high of $426.08 billion as of the week ended Apr. 13.
  • India’s annual infrastructure output grew 3.6 percent in May from a year ago, government data showed on Monday. The growth in output compares with a downwardly revised 4.6 percent year-on-year growth in April. During April-May, the annual output growth was 4.1 percent, data showed.

Global Market:-

  • The dollar slumped against its rivals Friday, on mixed U.S. economic data showing the economy created more jobs than expected but wage growth undershot estimates. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.34% to 93.81.
  • Nonfarm payrolls (NFP) rose by 213,000 in June, according to official data released on Friday. The data was higher than the consensus estimate for the creation of 200,000 jobs and above the 177,000 positions that the ADP report indicated on Thursday. The jobless rate unexpectedly rose from 3.8% to 4.0%, missing consensus expectations for it to remain unchanged. Average hourly earnings advanced 0.2% month-on-month in June, below expectations for it to repeat a 0.3% gain.
  • The U.S. trade deficit fell to a 1-1/2-year low in May as exports rose to a record high, boosted by an increase in shipments of soybeans and commercial aircraft. The Commerce Department said on Friday the trade gap narrowed 6.6 percent to $43.1 billion, the smallest since October 2016. Data for April was slightly revised to show the trade deficit falling to $46.1 billion, instead of the previously reported $46.2 billion.
  • Reacting to the imposition of import duties by the U.S. on billions of worth Chinese goods starting yesterday, China said it was forced to hit back with similar 25% tariffs on U.S. imports, which include autos and agricultural products. U.S. President Donald Trump has warned that subsequent rounds could see tariffs on more than $500 billion of goods, or roughly the total amount that the U.S. imported from China last year.
  • The onshore yuan was 0.15% lower at 6.6438 against the dollar and posted its fourth straight weekly decline. It fell to nearly one-year low earlier this week to 6.72, but trimmed losses after its central bank assured to keep the currency stable and at a reasonable level.
  • Federal Reserve policymakers supported further increases in interest rates as the pace of U.S. economic growth continued “above trend,” but concerns grew over the impact of trade tensions on business sentiment, according to the minutes of the Fed’s June meeting.
  • Activity in the UK service sector accelerated at the fastest pace since October 2017 in June, according to a closely watched business survey released on Wednesday. Research firm Markit said its services purchasing managers’ index rose to 55.1 in June from 54.0 in May, compared to forecasts for a reading of 53.9.
  • Activity in the UK construction sector accelerated last month, hitting a seventh month high, according to a closely watched business survey released on Tuesday. Research firm IHS Markit said its construction purchasing managers’ index rose to 53.1 in June.
  • Euro zone factory growth slowed to an 18-month low in June, IHS Markit’s June final manufacturing Purchasing Managers’ Index slipped to an 18-month low of 54.9 from May’s 55.5, a touch lower than a flash reading but still well above the 50 level that separates growth from contraction.
  • US. equities marched higher after monthly jobs data . The Dow Jones Industrial Average rose 99.74 points, or 0.41 percent, to 24,456.48, the S&P 500 gained 23.21 points, or 0.85 percent, to 2,759.82 and the Nasdaq Composite added 101.96 points, or 1.34 percent, to 7,688.39.
  • European markets finished higher on Friday with shares in Germany leading the region. The DAX is up 0.26% while London’s FTSE 100 is up 0.19% and France’s CAC 40 is up 0.18%.

Local Market:-

  • Indian shares ended higher on Friday, posting their sixth weekly gain in seven, while sentiment across the globe improved as investors calmly absorbed the imposition of tariffs by the United States and China.
  • The benchmark BSE index closed 0.23 percent higher at 35,657.86, gaining 0.66 percent for the week. It marked its highest weekly gain since June 1. The broader NSE index ended 0.21 percent higher at 10,772.65. The index jumped 0.54 percent for the week, the highest in nearly a month. Reliance Industries Ltd closed up 1.35 percent.