RUPEE: WEAKENS ON DOLLAR RALLY
Date: 04/04/2012
The Indian rupee commenced lower on Wednesday, April 04, 2012 and fell further through the day below the Rs 51 per dollar mark, a level from which the domestic currency had recovered yesterday. Rupee opened lower by 20 paise at 50.92 and slipped to a low of 51.12 so far during the day on global risk aversion. The local currency came under pressure alongside most risk assets due to a sharp surge in the US dollar overnight after minutes of a Federal Reserve meeting in March suggested no further monetary stimulus was likely in the United States. Local equities were also floating in the negative region.
Meanwhile, a possible surge in dollar demand from local oil importers, the biggest buyers of dollars in the domestic currency market, ahead of local market holidays on Thursday and Friday is also seen hurting the rupee. The currency market is shut on Thursday and Friday for local holidays. In the spot currency market, the Indian unit was last seen trading at 51.04, marginally higher as dollar is seen paring some of its overnight sharp gains. However, as against the previous close at 50.73, rupee is currently lower by around 32 paise or 0.62%.
Strength in Dollar dragged EURUSD to as low as 1.3182 from its prior day high of 1.3366 levels. The pair is currently seen quoting at 1.3199. DXY, an index which measures the performance of the U.S. unit against a basket of six currencies, has rebounded strongly since yesterday, gaining over 1% from a low of 78.66 to a high of 79.58 as hopes for further monetary stimulus in the United States waned, prompting traders to pare short-dollar positions and hurting demand for riskier assets like equities and currencies.
Domestic equities also lacked luster since early hours on account of global risk aversion coupled with a holiday shortened week on the domestic front, with traders possibly paring positions. The stock market remains closed tomorrow 5 April 2012 on account of Mahavir Jayanti and again on Friday, 6 April 2012 on account of Good Friday. Foreign institutional investors (FIIs) bought shares worth Rs 332.47 crore on Tuesday, 3 April 2012, as per provisional data from the stock exchanges. At the time of writing, India's key benchmark BSE Sensex is down 87 points at around 17510 while S&P CNX Nifty is lower by 33 points to be at 5325.
In the domestic currency futures market on the NSE, the forwards month 26- April-12 contract opened on Wednesday, April 04, 2012 at 51.05, higher than the spot market rupee. The contract hit an intraday high at 51.37 and registered a low at around 51.05 so far during the day. At the time of writing, the NSE April 2012 USD/INR contract was trading at around 51.29, higher by 31 paise or 0.61% as compared to previous close at 50.97.
With Asian and G7 currencies and equities seen under pressure, the USD INR is likely to trade with a positive bias today towards a possible ceiling of 51.35 and downside is likely to be limited at 51.22.
Meanwhile, a possible surge in dollar demand from local oil importers, the biggest buyers of dollars in the domestic currency market, ahead of local market holidays on Thursday and Friday is also seen hurting the rupee. The currency market is shut on Thursday and Friday for local holidays. In the spot currency market, the Indian unit was last seen trading at 51.04, marginally higher as dollar is seen paring some of its overnight sharp gains. However, as against the previous close at 50.73, rupee is currently lower by around 32 paise or 0.62%.
Strength in Dollar dragged EURUSD to as low as 1.3182 from its prior day high of 1.3366 levels. The pair is currently seen quoting at 1.3199. DXY, an index which measures the performance of the U.S. unit against a basket of six currencies, has rebounded strongly since yesterday, gaining over 1% from a low of 78.66 to a high of 79.58 as hopes for further monetary stimulus in the United States waned, prompting traders to pare short-dollar positions and hurting demand for riskier assets like equities and currencies.
Domestic equities also lacked luster since early hours on account of global risk aversion coupled with a holiday shortened week on the domestic front, with traders possibly paring positions. The stock market remains closed tomorrow 5 April 2012 on account of Mahavir Jayanti and again on Friday, 6 April 2012 on account of Good Friday. Foreign institutional investors (FIIs) bought shares worth Rs 332.47 crore on Tuesday, 3 April 2012, as per provisional data from the stock exchanges. At the time of writing, India's key benchmark BSE Sensex is down 87 points at around 17510 while S&P CNX Nifty is lower by 33 points to be at 5325.
In the domestic currency futures market on the NSE, the forwards month 26- April-12 contract opened on Wednesday, April 04, 2012 at 51.05, higher than the spot market rupee. The contract hit an intraday high at 51.37 and registered a low at around 51.05 so far during the day. At the time of writing, the NSE April 2012 USD/INR contract was trading at around 51.29, higher by 31 paise or 0.61% as compared to previous close at 50.97.
With Asian and G7 currencies and equities seen under pressure, the USD INR is likely to trade with a positive bias today towards a possible ceiling of 51.35 and downside is likely to be limited at 51.22.
| RBI REF RATE | ||||
| Date | USD | GBP | EURO | YEN |
| | | | | |
| 03-APR-12 | 50.56 | 81.05 | 67.49 | 61.63 |
| % Change* | 1.16 | 0.92 | 1.25 | 1.28 |
| *As against previous working day | ||||
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