Reliance Securities: Currency And Bond Update- July 23, 2020

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Reliance Securities Report

The Indian rupee ended flat on Wednesday against the U.S. dollar after starting the session with gains as escalating tensions between U.S and China and suspected intervention from the Reserve Bank Of India offset the weakness of the U.S. dollar.

The rupee ended at 74.76 to the dollar on Wednesday compared with 74.75 on Tuesday. The Chinese Yuan depreciated back below 7.00 per dollar amid escalating tensions between U.S and China.

The United States ordered China to close its consulate in Houston, while Reuters reported that said Beijing was considering shutting the U.S. consulate in Wuhan in retaliation. The escalating tensions between U.S. and China is likely to further deteriorate the global economic outlook as it reels under the impact of the pandemic. The benchmark S&P BSE Sensex and the Nifty 50 index ended 0.16% and 0.27% lower, respectively and weighed on sentiments. The one-year forward premium was at 2.93 paise against 2.91 paise in the previous session.

The euro rose against the U.S. dollar on Wednesday as risk-on moves continue in the wake of a fiscal stimulus deal reached by European Union leaders. The Sterling fell against the U.S. dollar on Wednesday on growing concern that the Brexit transition period will end without a deal between Britain and the European Union, and on the foggy economic prospects for the country as it looks to emerge from its coronavirus lockdown. The yen appreciated against the US Dollar on Tuesday.

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