Indian Rupee gains against Canadian Dollar

K.T. Jagannathan

The Canadian dollar has oscillated around the Sunday level of 56.8673 against the Indian rupee in early Monday morning (i.e. August 24, 2020) trading. On August 17, CAD was at 56.4997. As the day progressed, CAD moved down but picked later. The Canadian dollar (CAD) was trading at 56.8448 against the Indian rupee early Monday morning (at 7.43 a.m. GMT). It moved up to 56.8738. After going up further to 56.8965 at 8.10 a.m., it traded lower at 56.6835 at 9.21 a.m. IST. But it dropped to 56.3499 at 9.53 a.m. The slide persisted as CAD slid further to 56.2421 at 10.04 a.m. It gained to 56.3794 subsequently at 11.24 a.m. At 11.39 a.m., the CAD was at 56.3671 against rupee. Among most trade currencies

The Canadian dollar is among the most traded currencies on the foreign exchange market, as many institutions and individuals trade the CAD. Often, people refer to CAD as the Loonie, buck, Huard, and Piastre (in French). The Canadian dollar is held as a reserve currency by a number of central banks. It is also known as a commodity currency in view of Canada’s substantial raw material exports.

Bond yields up in India

The central bank in India, in the meanwhile, has sort of indicated that bond yields could, perhaps, stay high. The Reserve Bank of India, in fact, had offered high borrowing costs at a debt sale during the last weekend.

The Reserve Bank sold a 30-year bond on Friday at a cut-off yield of 6.7596%, versus the 6.65% estimated in a Bloomberg survey. The RBI also sold another security at a higher yield to raise 20 billion rupees ($267 million) more than planned.

The debt sale by the RBI comes shortly after the publication of the minutes of the last meeting of its policy-setting committee. A reading of the minutes indicates that the RBI has turned less dovish with higher inflation. Not surprisingly, traders are resigned to the possibility of a further rise in the yield curve. Borrowing costs have already been advancing, with the new benchmark 10-year bond yield jumping more than 30 basis points in the past three weeks.

Indian stocks end higher

The Indian benchmark share indices closed higher on Monday, led by gains in banks and financial stocks amid positive cues from global peers. Sensex ended at 38,799.08, up 364.36 points or 0.95%, while Nifty settled 94.85 points or 0.83% higher at 11,466.45.

CAD up against U.S. dollar

In the meantime, the American dollar was trading lower at 1.3159 against CAD at 10.13 a.m. The American dollar traded at 1.3172 against CAD on Sunday. It dropped a tad again to 1.3158 to CAD at 10.57 a.m.