Forex Research -
Open Market Comments
Demand of US currency continued to soar in the dealings as rupee shed 0/15 paisas today. The American dollar started off new day’s trading at Rs.79/85, continued to post gains and was trading at Rs.80/00 at close of markets on Friday. Thus, rupee ended the day on a negative note versus dollar in the kerb market. In the international market, the dollar fell the most in a week against the euro and dropped against the yen on speculation the U.S. recession and financial turmoil will deepen, damping demand for the greenback.
The U.S. currency weakened for a second day against the yen before a Labor Department report today that economists say will show the world’s largest economy lost more jobs in February than at any time since 1949. The greenback also declined after Moody’s Investors Service said yesterday it may cut the credit ratings of the three largest U.S. banks. The euro strengthened on speculation European investors will repatriate profits before the end of the first quarter on March 31.
“A very weak employment report is likely to spur selling of the dollar,” said Akifumi Uchida, deputy general manager of the marketing unit in Tokyo at Sumitomo Trust & Banking Co., Japan’s fifth-largest bank. “There are also worries over the U.S. banking sector.”
The dollar dropped to $1.2697 per euro as of 7:48 a.m. in London from $1.2540 late in New York yesterday. The decline was the biggest since Feb. 24. The U.S. currency slid to 97.28 yen from 98.07 yen. The euro rose to 123.64 per yen from 123.00 yesterday, and traded at 89.09 British pence from 88.82.
U.S. employers cut payrolls by 650,000 and the unemployment rate probably surged to a 25-year high of 7.9 percent, according to the median estimates in a Bloomberg News survey before the Labor Department data due at 8:30 a.m. in Washington.