Earlier this week, rupee had touched a three and half year high, due to tension that prevailed between India and Pakistan. However, the position eased due to a diluted position of the tension between the two countries.
- The 3 months implied volatility Index fell to a level which was seen before 14th Feb 2019 attack in Pulwama, Kashmir killing over 43 Jawans.
- This in turn had brought huge tension between the two countries.
- The meter stood at 8.22% on Friday which had gone upto 8.96% on Tuesday and it was 8.48% on Thursday.
- It is believed that traders would watch the progress made the United Nations Security Council (UNSC) on blacklisting Masood Azhar, the Chief of Pakistan based militant group Jaish-e-Mohammad which has claimed responsibility for the Pulwama attack.
- Bankers believe that fundamentals will now take over the geopolitical concerns and investors are believed to be regaining their confidence on domestic assets.
Rupee Position:
- On Friday rupee closed at 70.19 against the US dollar which was a 0.22% fall.
- Rupee was the best performer of all currencies during last month which it had to compromise due to Pulwama attack.
- The political scene across the border saw the traders going for long on the dollars.
- Companies tried to cover their overseas liabilities expecting a sharp swing in the rupee value against the US dollar.
- It is to note further that during February 13 and 27 the local unit lost around 0.62% against the greenback but gained 0.72% for the full month.
- A possible intervention from the US has helped in bringing the truce in as of now and the US foresees a possible solution to the Kashmir issue.
Results:
- 26th Feb 2019 the daily volume in the exchanged-traded futures had shot upto $4.4 billion which was one of the highest in the last one year.
- The three-month volatility index hit a three-and-half-year high at 8.96% as the military development may show an uncertainty ahead of General Elections.
- The increase was by 172 points subsequent to Pulwama attack.
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