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Rupee sheds grounds versus dollar in the kerb market

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Forex Research - Open Market Comments

Rupee gave up major grounds on the local desk versus US dollar in the kerb dealings today. The American dollar commenced new day’s trading at Rs.80/70, recovered major grounds and was changing hands at Rs.80/85 at close of markets on Thursday. In the international market, the dollar fell to an eight-week low against the yen on speculation the U.S. Federal Reserve will boost purchases of assets to counter the global slump, increasing the supply of the U.S. currency. The dollar weakened against 14 of the 16 most-traded currencies after the Fed projected a deeper recession, sapping demand for the U.S. currency as a refuge. New Zealand’s dollar rose for a fourth day after a government report showed immigration growth accelerated. The euro traded near a four- month high against the dollar before a European manufacturing and services report that may back the case for the region’s central bank to keep interest rates unchanged.

 

“The Fed may expand its asset-purchase program, which would increase the supply of greenbacks,” said Yuji Saito, head of the foreign-exchange group in Tokyo at Societe Generale SA, France’s third-largest bank. “This could undermine the value of the dollar and spur investors in the U.S. to put their funds overseas.”  The U.S. currency declined to 94.71 yen as of 7:26 a.m. in London from 94.88 yesterday in New York. It earlier fell to 94.29, the lowest since March 20. Japan’s currency rose to 130.62 per euro from 130.77. The euro traded at $1.3789 from $1.3780 yesterday, when it reached $1.3830, the strongest level since Jan. 5. The dollar fell as low as $1.5817 per pound, the weakest since Nov. 10, before trading at $1.5791 from $1.5755 yesterday. The New Zealand dollar rose to 60.96 U.S. cents from 60.58 cents.


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