Rupee posts biggest single day fall in 4 wks
MUMBAI |
MUMBAI (Reuters) – The rupee posted its biggest single-session fall in 4 weeks on Thursday as weak domestic equities and a volatile euro magnified selling pressure created by dollar demand from gold and oil importers.
The partially convertible rupee ended at 49.79/80 per dollar, close to the one-month low of 49.81 touched earlier, and 1.3 percent lower from its previous close, making it the largest fall in a day since Sept. 22.
“Volatility is most likely to stay until the European Union summit gives people some direction on the debt crisis,” said Naveen Raghuvanshi, an associate vice-president at Development Credit Bank.
Raghuvanshi, however, predicts that rupee will not weaken past 49.90, a level last seen on Sept. 23, according to Thomson Reuters data.
The last time the rupee touched 49.90, traders suspected that the Reserve Bank of India intervened and sold dollars.
The central bank, however, has time and again maintained that its policy is to intervene in foreign exchange market only to cut volatility. Data from the RBI to confirm any intervention will be released only in November.
The euro was at $1.3789 at end of rupee trade, down compared with $1.3840 on Wednesday, after moving in a band of $1.3674 to $1.3842 during the day, an indication of the choppiness, traders said.
The index of the dollar against six major currencies was at 76.925 points, above 76.705 points on Wednesday
German Finance Minister Wolfgang Schaeuble said European states are still at odds on the question of leveraging up the European Financial Stability Facility (EFSF) but Germany will oppose any European Central Bank involvement.
Earlier in the day, the euro had climbed sharply on after a document containing guidelines on the euro zone rescue fund reassured investors looking for clarity on how policymakers were planning to deal with the region’s debt crisis.
India’s main 30-share index which has already fallen 17 percent this year, ended 0.87 percent lower, pulling the rupee down along with dollar demand from oil importers.
Oil is India’s biggest import item and domestic oil refiners are the largest purchasers of dollars in the local forex market.
Gold traders in India, the world’s biggest consumer of bullion, stepped up last minute purchases to stock for next week’s festivals as prices fell for the fourth session in a row to their lowest level in more than six weeks.
The one-month onshore forward premium on the rupee was 25.25 points from 23.75 on Wednesday, the three-month premium was 61.75 points from 65.25 and the one-year premium was 143.25 points, from 155.25.
The one-month offshore non-deliverable forward contracts were quoted at 50.09, weaker than the spot rupee rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange ended at 49.8875, 49.8900 and 49.8800, respectively. The total traded volume on the three exchanges was $7.73 billion.
(Editing by Aradhana Aravindan)
Article source: http://feeds.reuters.com/~r/reuters/INbusinessNews/~3/LLprEECSFDo/idINIndia-60005020111020
del.icio.us |
Digg
Home
Set as homepage
Add to favorites
Rss
No Comments
Post your comment