Rupee posted its biggest weekly fall in 14 weeks

Rupee posted its biggest weekly fall in 14 weeks

26 Apr 2019 07:10 PM
 

Weekly Synopsis

 

Indian Rupee

Indian Rupee posted its biggest weekly fall in 14 weeks against the dollar, as a jump in crude oil prices and greenback strength kept investors wary of local assets.

For the week, the Rupee depreciated 0.9%, marking its largest decline since week ended Jan. 18 and a second straight weekly fall. The pair USDINR closes at 70.01 against the previous weekly close of 69.3550 on April 19th, 2019 to a greenback. It trades in a weekly range between 69.4975 to 70.28 against the greenback.

India's foreign exchange reserves fell to $414.15 billion, as of April 19, compared with $414.89 billion a week earlier, data released by the Reserve Bank of India on Friday showed. 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 slipped from 23-month highs on Friday, while global shares were on track for a fifth successive weekly gain despite subdued trade. The dollar index, which measures the greenback against a basket of peers, was down 0.06 percent on the day, off a nearly two-year high hit on the previous day.

Economic growth in the U.S. economy unexpectedly accelerated in the first quarter. The Bureau of Economic Analysis said Friday that gross domestic product registered a seasonally adjusted annual rate of 3.2% growth in the first three months of 2019, above expectations for a reading of 2.0% and an increase from the previous 2.2% expansion.

Euro hovered near its weakest level since May 2017 on Friday as traders waited to see whether United States GDP numbers due out later will reinforce signs of economic strength and send the dollar surging even higher.

New orders for U.S.-made capital goods increased by the most in eight months in March. The Commerce Department said orders for non-defense capital goods excluding aircraft, surged 1.3 percent to an all-time high of $70.0 billion. Economists poll had forecast core capital goods orders only nudging up 0.1 percent in March. They increased 2.8 percent on a year-on-year basis.

British retail sales rose for the first time in five months in April. The Confederation of British Industry said the later timing of Easter this year probably helped to push its monthly sales balance up to +13, meaning more retailers reported rising sales than falling sales.

Sales of new U.S. single-family homes rose to a near 1-1/2-year high in March, boosted by lower mortgage rates and house prices. New home sales increased 4.5 percent to a seasonally adjusted annual rate of 692,000 units last month, the highest level since November 2017.

Euro zone consumer confidence fell unexpectedly by 0.7 points in April from the March number, figures released on Tuesday showed. The European Commission said a flash estimate showed euro zone consumer morale decreased to -7.9 this month from -7.2 in March. Economists polled had expected a rise to -7.0.

U.S. home sales fell more than expected in March. Existing home sales dropped 4.9 percent to a seasonally adjusted annual rate of 5.21 million units last month. February's sales pace was revised down to 5.48 million units from the previously reported 5.51 million units. Sales fell in all four regions of the country last month.

Japan's jobless rate rose in March while the availability of jobs held steady at a high level, government data showed on Friday. The seasonally adjusted unemployment rate rose to 2.5 percent, against economists' median forecast for 2.4 percent, figures from the Ministry of Internal Affairs and Communications showed.

The benchmark Brent crude oil contract rallied this week, after Washington announced that all Iran sanction waivers would end by May 1 and all importers of Iranian oil would have to end their imports by that period or face U.S. sanctions.

Brent Crude was headed for its fifth consecutive weekly rise, the biggest weekly gaining streak in one year. The contract has risen 9.5% in last five weeks. Earlier this week, the contract hit the $75.60-per-barrel mark, its highest since Oct. 31. It was last trading 1.9% lower at $72.87.

Activity in Germany's services sector rose to a seven-month high in April, a survey showed on Thursday. IHS Markit's flash composite Purchasing Managers' Index (PMI) measuring activity in the services and manufacturing sectors that together account for more than two-thirds of the economy rebounded to 52.1.

The Turkish lira weakened 0.95% against the dollar after Turkey's central bank left interest rates unchanged at 24% but in a dovish shift dropped a previous reference to possible further tightening if needed to address inflation.

Local Market

Indian shares ended higher on Friday, boosted by heavyweight ITC Ltd, but the indexes marked their first weekly fall in eight ahead of the fourth-quarter corporate results.

The benchmark BSE index closed up 0.41 percent at 38,767.11, while the broader NSE index ended 0.4 percent higher at 11,643.45. Both indexes finished the week about 0.2 percent lower.