Rupee continues to shed grounds versus US dollar in the kerb market

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Forex Research - Open Market Comments

Demand of US currency continued to remain high as the local currency plunged in the kerb dealings. The American dollar started off new day’s trading at Rs.79/40, posted more gains on the local desk and was trading at Rs.79/60 at close of markets on Wednesday. Thus, rupee continued its negative zone journey versus dollar in the open market. In the international, the yen gained for a third day against the euro on speculation European banks will disclose increasing losses due to the financial crisis in the region.

The yen strengthened versus 13 of the 16 most-active currencies on concern stock declines will spur investors to sell higher-yielding assets they bought with funds from Japan. The euro traded near a 10-week low against the dollar on speculation Commerzbank AG, Germany’s second largest, and ING Groep NV, the biggest Dutch financial company, will report combined losses of more than 4 billion euros ($5 billion) when they release earnings today, according to Bloomberg News surveys.

“Risk-averse sentiment is likely to persist,” said Yuji Saito, head of the foreign-exchange group in Tokyo at Societe Generale SA, France’s third-largest bank by market value. “The yen may be bought.”

The yen climbed to 116.17 per euro as of 1:07 p.m. in Tokyo from 116.27 late in New York yesterday. It climbed to 92.23 versus the dollar from 92.41. South Korea’s won fell the most among the 16 major currencies versus the yen, losing 0.6 percent to 15.84927. Brazil’s real dropped 0.3 percent to 39.3405 yen and Taiwan’s dollar slipped 0.5 percent to 2.662 yen.

The euro traded at $1.2603 from $1.2582 yesterday when it touched $1.2563, the lowest level since Dec. 4. It was at 88.42 British pence from 88.37 pence.

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