In lacklustre trading for most of the week, the rupee recovered nearly all of its early losses, still ending lower by a two paise at 55.52 against the Greenback during the week under review.

At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed the week lower at 55.57 and dropped further to a one-week intra-trade low of 55.88 on Tuesday on month-end dollar demand from importers, mainly oil refiners and also weakness in local equities.

Forex dealers attributed listless trading most of the week to traders taking a cautious approach ahead of high- profile speeches on August 31 by US Federal Reserve Chairman Ben Bernanke at the Jackson Hole Symposium and European Central Bank (ECB) chief Mario Dharghi.

However, the rupee later bounced back with a vengeance to settle at week’s high of 55.52, still showing a modest fall of two paise over its last weekend’s close of 55.50.

Late bounce was due mainly to dollar selling by exporters on expectations of fall in dollar value overseas.

The dollar was under pressure on hopes of US Federal Reserve’s chief on Friday dropping hints on monetary easing at the Jackson Hole conference in Wyoming, which later helped the rupee recovery.

The Indian benchmark Sensex closed the week lower by 353.65 points, or 1.99 per cent, while Foreign Institutional Investors (FIIs) infused $449.45 million on August 30, taking a total to over $12.29 billion in the current calendar year so far, as per Sebi data.

Meanwhile, the gross domestic product (GDP) edged up to 5.5 per cent in April-June this fiscal, from nine-year low of 5.3 per cent in the preceding quarter, but was sharply down from 8 per cent in the same period last fiscal.

(This article was published on September 1, 2012)
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