Financial Daily from THE HINDU group of publications
Tuesday, Jan 10, 2006
Financial Daily from THE HINDU group of publications Tuesday, Jan 10, 2006 |
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Forex Money & Banking - Forex Rupee moves up to 3-month high Our Bureau
Mumbai , Jan. 9 THE rupee surged against the dollar moving to a three-month high, tracking the global movement of other major currencies. The domestic currency opened higher by 25 paise at 44.31/33 from Friday's close of 44.5760. It touched an intra-day high of 44.26 and closed at 44.29/30. Dealers said the rupee opened with a gap tracking the jump in the yen, which moved from 116 yen on Friday to 114 yen against the dollar on Monday. US job data was a negative for the greenback. "The US payroll data released on Friday was slightly worse than expected," said a dealer at a private bank. The local currency has now gained by about a rupee in the past one month. Mr D. Sampat Kumar, Head (Treasury), IndusInd Bank, said the appreciation in the other major currencies has buoyed the rupee. "The minutes of the Federal Open Market Committee meeting have been interpreted as there being no further hikes in the interest rate. "Besides, in the domestic market, uncertainty about the impact of the $7 billion IMD redemption no longer exists." Dealers said that strong dollar inflows from foreign institutional investors also helped the rupee to firm up against the US currency. FII inflows into the domestic equity market have been to the tune of $600 million in the first week of 2006. In a scenario where the European Central Bank is expected to hike its interest rate again while the US rates are seen remaining stable, the euro could further appreciate to $1.25. Interest rates in Japan could also move up from the current zero per cent, said the treasury head of a private bank. Going forward, the rupee could be range-bound. "If there are sufficient dollar inflows in the market, the rupee could range between 44-44.30. However, there could be support for the dollar at the 44 level," said Mr Kumar.
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