INDIAN RUPEE EASES ON GLOBAL GROWTH WORRIES
Date: 09/04/2012
The Indian rupee eased on Monday after a four-day trading hiatus, as renewed worries over global economic growth due to bleak U.S. jobs data last week hurt appetite for riskier assets like equities.
At 10:22 a.m. (0452 GMT), the rupee was at 51.26/27 to the dollar, weaker than its Wednesday's close of 51.055/065. The market was shut on Thursday and Friday for local holidays.
"Global sentiment is weak thanks to the U.S. jobs data and equities too are down. So some pressure on the rupee is expected," said a senior foreign currency trader with a foreign bank.
India's main share index was down nearly 1.2 percent, while U.S. payrolls rose far less than expected in March with 120,000 jobs being added last month, the smallest increase since October.
However, bunched up dollar inflows, typically seen after market holidays, could provide some support for the rupee, traders said.
Traders also expect the central bank to step in to avert a sharp fall in the rupee. They see the rupee trading between 51.20 and 51.50 to the dollar this week.
"Above 51.50, most banks believe the Reserve Bank of India will intervene and sell dollars. So anything above that will make market cautious," said a foreign currency trader with a state-owned bank.
The RBI sold a net $7.3 billion in January in the spot market, after sales of $7.8 billion in December. However, the bank has maintained it does not target any particular exchange rate and intervenes only to smooth volatility.
The one-month offshore non-deliverable forward contracts were at 51.73.
In the currency futures market, the most-traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and on the United Stock Exchange were all around 51.58, on a total volume of $640 million.
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