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Rupee sheds grounds versus US currency in the kerb market

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Forex Research - Open Market Comments

The national currency shed significant grounds versus US dollar in the kerb dealings amid rise in dollar’s demand. The greenback kicked off new day’s trading at Rs.79/80, posted gains on the local desk and was trading at Rs.80/00 at close of markets on Monday. Thus, rupee incurred a loss of 0/20 paisas versus dollar in the open market dealings.

In the international market, the euro fell versus the dollar, ending four days of gains, on speculation European nations’ reluctance to boost spending will extend the region’s recession.

The 16-nation currency declined against nine of the 16 major currencies after European officials, speaking as the Group of 20 finance ministers met on the weekend, said they had spent enough money to combat the financial crisis and don’t want to blow out their budgets. The yen fell for a third day against the dollar as expectations of a Bank of Japan plan to buy government debt spurred investors to seek higher-yielding assets elsewhere.

“The expectation for further monetary easing and the reluctance to expand fiscal spending will weigh on the euro,” said Satoru Ogasawara, foreign-exchange analyst and economist in Tokyo at Credit Suisse Group AG, the second-largest Swiss bank. “Such policies apply downward pressure on the European currency.”

The euro weakened to $1.2891 as of 12:42 p.m. in Tokyo from $1.2928 late in New York on March 13. The European currency traded at 126.64 per yen from 126.65. Japan’s currency declined to 98.24 per dollar from 97.95.

The South Korea won strengthened to 14.808 per yen from 15.164 at the end of last week. The New Zealand dollar traded at 51.49 yen from 51.50.


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