The Indian rupee ended the session lower at intraday low of 83.04/05 levels compared to its opening at 82.78/79 levels due to broad weakness in Asian currencies and likely dollar outflows. Rupee traded in the range of 82.78-83.04 levels today. While some traders cited corporate dollar outflows, others pointed to equity-related outflows. Dollar demand from oil companies also exerted pressure on the rupee. The Chinese Yuan and other Asian currencies dropped after a sluggish data release from China renewed concerns about the country’s economic growth trajectory. Indian government bond yields little changed amid lack of fresh triggers. Indian shares advanced for the third consecutive session led by realty firms on rising property registrations and pharma stocks, while the more domestically-focussed mid-caps and small-caps hit fresh record highs. The Nifty 50 index settled 0.24% higher at 19,574.90, while the S&P BSE Sensex gained 0.23% to 65,780.26. In the forward segment 1mth, 3mth and 6mth annualized premia ended the day at 1.31%, 1.35% and 1.42% respectively.
Jitters about global growth caused the dollar to rise on Tuesday, sending the euro to its lowest in nearly three months and the Aussie down over 1%, not helped by underwhelming data in China and the Reserve Bank of Australia keeping rates steady. The euro was down 0.45% at 1.0747, while sterling fell 0.6% to $1.2555, with both their lowest levels since mid-June after poor activity data in China and Europe drove a risk off tone across asset classes. China’s Caixin services PMI was at levels last seen when swathes of the country were under lockdown, the latest in a series of weak data points from the world’s second largest economy, while data showed euro zone business activity decline faster than initially thought last month. U.S. treasuries fell on resuming trading after a holiday with the U.S. 10 year yield up 4.5 basis points at 4.2163%. The China-exposed Australian dollar was the most affected, falling 1.46% to $0.6372 hurt too by the RBA’s latest policy update. The central bank left its benchmark cash rate on hold at 4.1% for a third month in a row, and although it left the door open to future increases, markets are pricing only about a 30% chance that rates go higher from here. The dollar was strong across the board, climbing against China’s currency, and was last up 0.47% at 7.3096 against the Yuan traded offshore and up nearly as much in onshore markets. The greenback also rose 0.56% against the Canadian dollar to $1.3669, its highest since late March, and up 0.85% against the Swedish crown at 11.10, its highest since November 2022. The yen was at around a one-week low and analysts see it grinding toward 150 per dollar unless there is a sharp change in the gap between Japanese yields, pegged near zero, and U.S. yields comfortably above 4%. A dollar last bought 146.95 yen. A Japanese government bond auction on Tuesday was uneventful, leaving 10-year Japanese yields at 0.65%.