Rupee ends at 46.30/31 against dollar

November 11, 2009 by Prakash Dhawan · Leave a Comment
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The rupee today surged by 20 paise to nearly three-week high of 46.30/31 against the US currency with dollar plunging to 15-month low against its European rivals in overseas markets.

Dealers at the Interbank Foreign Exchange market said the rupee drew support mainly from weakness in dollar against a basket of currencies. The dollar fell to a 15-month low after indications that US interest rates will remain near zero for some time.

They said a rally in equity markets on the back of sustained capital inflows also helped the domestic unit to gain against the US currency.

The Indian benchmark Sensex today shot up 409 points or 2.49 per cent, while Asian indices closed in the positive terrain.

Rupee had surged by 2.0 per cent since November 4 but took a brief pause yesterday easing by five paise in line with downward correction in local stocks.

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Dollar pulls back after fed

November 8, 2009 by Prakash Dhawan · Leave a Comment
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The US dollar pulled back from a one-month high towards the end of last week after the Federal Reserve reiterated its commitment to keeping US interest rates low for the foreseeable future.

The central bank said it expected rates to be on hold at ultra-low levels for an extended period.

The dollar had risen sharply over the week amid nervousness that global central banks would start to remove ultra-loose monetary policy accommodation. This stoked haven demand for both the dollar and the yen, as riskier assets such as equities and commodities faltered.

Data coming out of the US was mostly positive with the Institute for Supply Management’s factory index rising to 55.7, its highest level since April 2006.

A report from the National Association of Realtors also showed that home resales in the US rose in September for an eighth straight month. The week ended with the release of the non-farm payrolls report and the unemployment figures.

The Labour Department reported that US non-farm payrolls fell by 190,000 in October, the smallest drop since August 2008. However, this was higher than forecasts which had estimated a drop of 175,000.

The unemployment report surged to 10.2 per cent, its highest level since 1983.

Euro

The euro weakened over the week as European stock markets tumbled, and some mixed data from the US reduced risk appetite among investors.

By Friday, the euro was lagging against most of its counterparts following cautious comments by members of the European Central Bank council.

Despite this, economic recovery appears to be on track, as industrial production increased 1.1 per cent in August.

Euro zone business confidence also improved for the seventh straight month and other regional measures of confidence such as the ZEW survey also show economic sentiment to be improving across Europe.

The main highlight of the past week was the ECB decision to leave its target rate at one per cent.

After signalling that the ECB had little intention of raising rates by calling the current rate appropriate, ECB President Trichet said the bank would monitor inflation along with the overall economy as it considers future decisions.

Range for previous week:

$1.4600-$1.4900(Dh5.3625 -Dh5.4727)

Range for this week:

$1.4623-$1.4917 (Dh5.3710 -Dh5.4790)

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