Brexit uncertainties make currency market a speculators’ haven; Pound, yuan hit rupee
“Traders are seen going long on the pound sterling,” said Anindya Banerjee.
Total volumes surged to 4.54 crore compared with 1.68 crore contracts on September 30, show NSE data compiled by Kotak Securities.
“Traders are seen going long on the pound sterling,” said Anindya Banerjee, currency analyst at Kotak Securities. “The rupee too has been showing signs of weakness in the past few weeks as trade war worries continue to weigh on the Chinese yuan.”
Total traded value jumped nearly three times to Rs 4,161 crore last week, compared with Rs 1,474 crore at the beginning of the month.
Such high volumes were last seen in March 2017.
Since the beginning of this month, the rupee lost 0.40 per cent against the dollar. The local unit plunged about 5 per cent against the pound.
Open Interest, or the number of outstanding contracts in the poundrupee pair and a key gauge for investor participation, has soared to 1,12,640 last Thursday from 40,737 on September 30. The OI number fell a tad on Friday as traders shied away from adding to more positions ahead of an extended weekend.
Financial markets will remain shut on Monday due to polls in Maharashtra.
“It is becoming a speculators’ haven," said Gopal Tripathi, treasury head at Jana Small Finance Bank. "While the pound is gaining against the dollar amid Brexit uncertainties, the rupee too is mirroring the weakness in yuan against the dollar.”
This month, the British pound gained over 5 per cent against the greenback.
In October, India’s local unit has slipped to be the third worst performing emerging market currency. The pound sterling has turned out to be the best performing major currency against the dollar.
The rupee closed at 91.59 Friday compared with 91.57 a day earlier against the pound.
The UK government said it would push ahead with its efforts to pass the Brexit deal, despite a major setback to its plans, BBC reported on Sunday.
Boris Johnson had to ask the EU for an extension to the October 31 exit date after MPs backed a move to delay approval of the deal on Saturday.