Rupee posts recovery against dollar in the open market
Tuesday, 24 February 2009 17:00
Forex Research -
Open Market Comments
The local currency posted recovery against dollar in the kerb market as demand of US currency declined. The American currency started off new day’s trading at Rs.79/50, shed mere grounds and was changing hands at Rs.79/40 at close of markets on Tuesday. Thus, rupee ended the day on a positive note versus dollar in the kerb. In the international market, the yen fell to a 12-week low against the dollar on concern a government report tomorrow will show the trade deficit widened to the most in more than two decades, reducing the allure of the currency as a haven.
Japan’s currency also traded near the weakest level in a month versus the euro on concern the economy will keep shrinking after a gross domestic product report last week showed the recession is deepening. The dollar weakened versus the euro on speculation a U.S. report today will show home prices fell at the fastest pace on record in December.
“The yen appears to be losing some of its safe-haven status,” said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan’s largest currency broker. “Japan’s economic and political situation is poor, which may be behind this.”
The yen fell to 95.07 per dollar as of 12:59 p.m. in Tokyo from 94.61 yesterday in New York. It touched 95.20, the weakest level since Dec. 1. Japan’s currency declined to 120.90 per euro from 120.10 yesterday, when it touched 121.93, the lowest since Jan. 19.
The dollar weakened to $1.2717 per euro from $1.2694 yesterday. It fell to $1.4552 against the British pound from $1.4487 and traded at 1.1685 Swiss francs from 1.1686.
Japan’s currency declined for a fifth day against the euro, the longest stretch since September, as the Ministry of Finance may say tomorrow the nation’s trade deficit widened to 1.2 trillion yen ($12.7 billion) in January, the largest shortfall in 23 years, according to a Bloomberg News survey.