The Indian rupee slipped for a second straight week against the dollar

The Indian rupee slipped for a second straight week against the dollar

17 May 2019 06:04 PM
 

Financial Market Overview

17th May, 2019

Evening Coffee

MARKETS AT CLOSE                                    

Indian Rupee

  • The Indian rupee slipped for a second straight week against the dollar, weighed by a decline in the Chinese Yuan amid escalation in U.S.-China trade tensions, while crude oil prices rallied.
  • The rupee settled at 70.22 to a dollar, against 70.03 at the previous close. It opened at the day’s low of 70.26 and rose to the day’s high of 70.08, as shares rallied ahead of election exit polls at home. Most Asian currencies ended lower against the dollar. On a weekly basis, the rupee slipped 0.4%, adding to last week’s 1% depreciation. Rupee depreciated as the trade war between China and the U.S. escalated, but since shares rallied in run-up to the exit polls, the fall for the week was not significant
  • Exit polls and thereafter general election results will be key triggers next week and any depreciation above 70.70 levels can cause further fall towards 71.65/72 levels. A majority for the BJP will see the rupee gaining towards 69.50/69.30 zones.

Indian Equities

  • Sensex and Nifty rallied over 1 percent each, closing near their day's high level on May 17 ahead of exit poll of Lok Sabha election 2019. 
  • At close, the Sensex was up 537.29 points at 37930.77, while Nifty was up 150.10 points at 11407.20. About 1381 shares have advanced, 1112 shares declined, and 140 shares are unchanged.

Global Markets

  • European markets are lower today with shares in Germany off the most. The DAX is down 0.82% while France's CAC 40 is off 0.44% and London's FTSE 100 is lower by 0.31%.
  • Eurozone consumer spending indicators impressed, with sharp gains in April. Final CPI climbed 1.7%, matching the forecast. This was up sharply from 0.8% in March. Final Core CPI rose 1.3%, edging above the estimate of 1.2%. This marked the strongest gain since March 2013. In the U.S., today’s highlight is UoM Consumer Sentiment, which is expected to rise to 97.8 points.
  • The U.S. posted strong data on Thursday, sending the euro lower. Unemployment claims dropped sharply to 212 thousand, down from 228 thousand. This was its lowest level in four weeks. On the manufacturing front, the Philly Fed Manufacturing Index jumped to 16.6 in May, a 4-month high. This was up sharply from 8.5 in April. Building permits and housing starts both improved in April. If U.S. numbers continue to point upwards and beat the forecasts, the Federal Reserve may have to reconsider its neutral stance towards rate moves.
  • Yesterday, UK Prime Minister Theresa May said that she would begin the process of stepping down in June, even if her Brexit deal fails to pass through Parliament for a fourth time.
  • The ‘Greenback’ is also benefiting from rising hopes that the flash US Michigan Consumer Sentiment Index for May will increase today, with the consensus being that it will improve at 97.5 against April’s 97.2.
  • The Greenback is also benefiting from rising hopes that the flash US Michigan Consumer Sentiment Index for May will increase today, with the consensus being that it will improve at 97.5 against April’s 97.2.

 

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