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Rupee opens little changed, dollar steady
New Delhi, Mar 26: The rupee opened at 44.71/74 and slipped to 44.75/76 in early hours of trading but quickly rose back to 44.74/745 levels.
New Delhi, Mar 26: The rupee opened at 44.71/74 and slipped to 44.75/76 in early hours of trading but quickly rose back to 44.74/745 levels.
Though market players were sidelines in morning trade, sentiments are bullish. While strong foreign fund flows and corporate flows may continue, month end demand may cap the rupee’s gains.
Further likely intervention by RBI may also thwart the rupee’s gains. Sentiments were buoyed as exports registered a 35% growth in February despite the gains in Rupee. Forwards are likely to stay firm today on expectation of easy cash dollar liquidity and firm spot rupee.
The US dollar was steady against the Euro, although speculation that the European Central Bank may cut rates continued to weigh on sentiment towards the European unit. Markets will gauge tonight's IFO outcome on monthly German business confidence for how Eurozone economic conditions are holding.
The US currency was broadly higher overnight, and most of the punch came against the sterling, which was undermined by comments from Bank of England Governor Mervyn King, who warned about the toll of the strong currency on the UK economy. The remarks were interpreted as a signal that the Bank of England is less likely to raise interest rates in the near term.
The yen rose today after reports showed that economic growth in Japan is boosting spending, which may lure more overseas investment into Japan. Gains in the yen were capped by speculation Japan will sell its currency to protect exporters' earnings before the March 31 end of the fiscal year.
Standing out in the fray was a full cent rally in the Canadian dollar sparked by speculation of oil exporters converting their receipts to their home currency.
Markets shall scrutinize tomorrow’s speeches from Chairman Greenspan and Governors Gramlich and Kohn on any gentle upward revision in their inflation assessment, as this could be supportive for long yields and the dollar.
Bureau Report
The US dollar was steady against the Euro, although speculation that the European Central Bank may cut rates continued to weigh on sentiment towards the European unit. Markets will gauge tonight's IFO outcome on monthly German business confidence for how Eurozone economic conditions are holding.
The US currency was broadly higher overnight, and most of the punch came against the sterling, which was undermined by comments from Bank of England Governor Mervyn King, who warned about the toll of the strong currency on the UK economy. The remarks were interpreted as a signal that the Bank of England is less likely to raise interest rates in the near term.
The yen rose today after reports showed that economic growth in Japan is boosting spending, which may lure more overseas investment into Japan. Gains in the yen were capped by speculation Japan will sell its currency to protect exporters' earnings before the March 31 end of the fiscal year.
Standing out in the fray was a full cent rally in the Canadian dollar sparked by speculation of oil exporters converting their receipts to their home currency.
Markets shall scrutinize tomorrow’s speeches from Chairman Greenspan and Governors Gramlich and Kohn on any gentle upward revision in their inflation assessment, as this could be supportive for long yields and the dollar.
Bureau Report