RUPEE WEAKENS ON GLOBAL RISK AVERSION
DATE: 16/04/2012
The rupee fell to a three-month low versus the US dollar on Monday, as global investors continued to shun risk amid growing worries about economic growth in various part of the world.
Rising bond yields in Spain has revived worries about Europe's long-running debt crisis and its fallout for the world economy. China's decision to widen the dollar-yuan trading band was also weighing on Asian currencies.
rupee was trading at 51.59/60 per dollar after being as low as 51.6950 and as high as 51.5850. The local currency opened at 51.63 as against the previous close of 51.3025.
The euro declined to a one-month low against the dollar before Spain auctions bills and bonds later today. The 17-nation currency slid to its weakest versus the British pound since September 2010 after the cost of protecting Spain’s debt from non-payment climbed to a record.
Five-year credit-default swaps (CDS) linked to Spain’s bonds jumped to 502.5 bps at the end of last week, the highest on record going back to October 2004.
Yields on Spain's 10-year notes soared as much as 18 basis points to 6% on April 13, nearing the 7% level that forced Greece, Ireland and Portugal to demand rescue packages.
Meanwhile, European officials will travel to Washington this wee to demand a bigger global war chest to combat the region's debt crisis.
China’s yuan fell versus the US dollar after the central bank doubled the so-called trading band of the currency.
The yuan weakened 0.3% to 6.3196 per dollar after the People’s Bank of China said on April 14 that the currency can move as much as 1% against the dollar from a so-called daily fixing rate, compared with the previous limit of 0.5%.
The Australian dollar fell amid ongoing global risk aversion.
Stock indices across Asia declined today, tracking weakness across US and European markets, on mounting concerns about the state of the global economy.
Disappointment over recent economic data out of China and the US has prompted global investors to cut exposure to risky assets.
An Asian benchmark fell for the first time in three days today and Australia’s dollar weakened after the Bank of Korea cut its economic growth estimate and Spain's default insurance costs hit record high.
US equity benchmarks fell sharply on Friday, capping its first back-to-back weekly decline since November, as confidence among US consumers cooled in April from a one-year high.
POWERED BY: COMMODITY INSIGHTS
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