Forex Research -
Open Market Comments
Demand of US currency remained declined as the national currency made recovery of 0/10 paisas on the local desk. The American dollar set off new day’s trading at Rs.80/20, shed grounds and was changing hands at Rs.80/10 at close of markets on Wednesday. Thus, rupee ended the day on a positive note versus dollar in the open market. In the international market, the yen traded near the weakest level against the euro this year after the Bank of Japan said it will step up purchases of government debt, encouraging investors to seek higher-yielding assets overseas.
The dollar was near a one-month low versus the euro as Asian stocks extended a rally in global equities, damping demand for the U.S. currency as a refuge from the financial turmoil. The Dollar Index declined for a seventh day, the longest losing streak in a year, on speculation the Federal Reserve will say at the end of a two-day policy meeting today that it is shifting toward more aggressive monetary expansion.
“Governments and central banks are taking various measures which are supporting sentiment that the worst of the financial crisis may be over,” said Yuji Saito, Tokyo-based head of the foreign-exchange group at Societe Generale SA, France’s third- largest bank. “People who had shunned risk are returning to the markets. This is causing selling of the dollar and the yen.”
Japan’s currency traded at 128.57 against the euro as of 12:53 p.m. in Tokyo, from 128.35 yesterday in New York, when it slid 0.8 percent. It earlier dropped to 128.83, the weakest since Dec. 29.
The dollar was at $1.3048 per euro from $1.3017 yesterday, when it declined 0.4 percent. The U.S. currency touched $1.3072 on March 16, the lowest level since Feb. 10. The yen was at 98.50 per dollar from 98.60.