Follow Blog For More Updates..One and only Blog for All Latest results and other latest happenings in the country rich in pedagogy..


PanoramaOfIndia Blog

Custom Search

Thursday, July 9, 2009

Rupee falls of 8 week low

The rupee recovered from eight-week lows on Thursday as the dollar fell sharply against major currencies, but its gains were capped by a choppy local sharemarket.

The partially convertible closed at 48.72/73 per dollar, after falling to 49.06, its weakest since May 15, up 0.3 percent from Wednesday's close of 48.88/89. However, the unit is still down 1.7 percent this week.

"Custodial banks were seen selling dollars in the market today and the drop in the dollar index also had an impact on the rupee," Astosh Raina, head of forex trading at HDFC Bank said.

"Think the rupee will touch 49 again tomorrow, unless equities rally a bit. There is Infosys (INFOSYS.BO : 1676.75 -28.95) results tomorrow which would be the key to the direction for stocks and will be watched," he added.

The yen and the dollar fell on Thursday, correcting some of the previous session's gains, with a recovery in European stocks helping buoy the euro and perceived higher risk currencies. The index of the dollar's versus six majors was down 0.7 percent.

Indian shares edged down 0.08 percent on Thursday, but trading was choppy as investors awaited direction from quarterly earnings amid doubts about the prospects for a swift global economic recovery and the outlook for fund flows.

Foreigners have bought about $1 billion of stocks so far this month, taking net inflows in 2009 to nearly $6 billion, a key factor in the rupee's rise from its record low of 52.2 in March.

"In our view, the door remains open to a correction of most Asian currencies in the short term because the recent equity market rally may have overestimated the pace of the recovery and underestimated the challenges ahead," economists at Calyon said in a note.

"Still, beyond this correction, we believe that most Asian currencies will resume appreciation," they said.

The global economy is slowly starting to pull out of its deepest recession since World War Two but a recovery will be sluggish and policies need to remain supportive, the International Monetary Fund said on Wednesday.

One-month offshore non-deliverable forward rupee contracts traded in Singapore were quoted at 48.79/89, weaker than the onshore spot rate.

In the currency futures market, the most traded near-month contract on the National Stock Exchange (^NSEI : 4080.95 +2.05) and MCX-SX closed at 48.7875 and 48.79 respectively, with the total traded volume on the two exchanges at about $1.7 billion.


Post a Comment