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Rupee snaps 4-day gaining streak

04 May 2020 Evaluate

Snapping its four-day winning streak, Indian rupee ended sharply weaker against dollar on Monday as demand for the American unit from importers and banks picked up. Sentiments turned pessimistic with a government data showing that India’s core sector output contracted 6.5% in March, marking the worst performance by the key infrastructure areas going back to 2005, as the nationwide lockdown to combat the spread of Covid-19 stalled the economy. Sentiments also got hit after Indian manufacturing activity growth declined sharply in the month of April 2020, amid national lockdown restrictions to help stem the spread of the coronavirus disease 2019 (COVID-19), which in turn led to widespread business closures. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance -fell to 27.4 in April from 51.8 in March. Strength in dollar against major rival currencies and heavy selling in domestic equities also kept pressure on the Indian rupee. On the global front, U.S. dollar surged against most major currencies on Monday amid fears that last year’s U.S.-China dispute will be re-ignited, this time over the novel coronavirus.

Finally, the rupee ended at 75.73, 64 paise weaker from its previous close of 75.09 on Thursday. The currency touched a high and low of 75.80 and 75.65 respectively. The reference rate for the dollar stood at 75.11 and for Euro stood at 81.61 on April 30, 2020. While the reference rate for the Yen stood at 70.48, the reference rate for the Great Britain Pound (GBP) stood at 93.59.  

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