The Indian rupee ended higher against the dollar

The Indian rupee ended higher against the dollar

16 Oct 2019 05:36 PM
 
The Indian rupee ended higher against the dollar for the first time in three sessions, on custodian greenback inflows that eroded an early decline due to a slump in the Chinese yuan. The rupee ended at 71.44 to a dollar against 71.54 at previous close. It earlier fell to a one-month low of 71.72 before rising to the day’s high of 71.36 on dollar sales by state-run lenders and foreign banks. A reversal in the rupee’s direction was largely led by large corporate inflows and some foreign inflows in the equity market. Dollar sales by RBI also helped. Going forward, we think that there is no appetite in the market to go short on the rupee considering that the RBI is actively on dollar sales, and the rupee will largely trade in the 71.00-72.00 range in the near term.
Asian currencies settled mixed, while the onshore yuan ended at a one-week low of 7.1030, adding to yesterday’s 0.3% decline. The Chinese central bank fixed the yuan’s daily reference rate at the lower side of analysts' forecasts.
The yuan’s fix is being watched to ascertain the Chinese central bank’s intention after a preliminary trade agreement was reached with the U.S. last Friday. The deal involved concessions related to China's currency management. Most Asian shares ended higher as risk appetite received a boost on hopes that Britain can secure a deal to avoid a disorderly exit from the European Union.
Meanwhile, India’s benchmark BSE Sensex ended 0.2% higher. Foreign portfolio investors net bought local shares worth $304.20 million yesterday. These investors were net buyers of equities worth $434.71 million, so far in October.

 

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