RUPEE: Remains subdued with no definite cues

MoM Team / Mumbai, Feb 03, 10:46 AM

The Indian rupee commenced relatively flat on Friday, February 03, 2012 with no positive cues from global as well as regional peers. Overnight slide in the euro-dollar pair weighed down rupee to open at Rs 49.14 to a dollar and downbeat local equities further battered the domestic currency to a low of 49.19 during early trades. Rupee however managed to come off early lows and climbed to as much as 49.09 so far during the day. In the spot currency market, the Indian currency was last seen trading at 49.13 at 10.40 AM IST, up just 2 paise or 0.05% as compared to previous close at 49.15.



The European common currency edged lower against the US dollar during early hours, adding pressure to Asian currencies including rupee. The decline came post a volatile session yesterday, oscillating between a high of 1.3196 and a low of 1.3084. Optimism in the single common currency came on the back of comments from Chinese Premier Wen Jiabao that China is considering ways to increase its participation in the EFSF/ESM through the IMF in order to help tame the ongoing Euro zone crisis. However, statement from Eurogroup head Jean Claude Junker, that measures taken during the recent EU summit to tackle the ongoing crisis have been “quite inadequate”, dragged EURUSD to its session low of 1.3084 on Thursday. The pair is currently quoting at around 1.3128. The DXY Index, which measures the performance of the U.S. unit against a basket of six currencies, is currently seen up 0.06% at 79.04, regaining 79 levels.



Meanwhile, a dull performance among local shares alternating close to the red line added no cheer for the Indian unit. Most regional markets also lost ground on Friday as investors digested a raft of earnings reports and remain cautious ahead of the key US jobs report due out later in the global day. Foreign funds stepped up buying of Indian stocks, with a net inflow of a massive Rs 1941.23 crore on Thursday, as per provisional data from the stock exchanges. At the time of writing, India's key benchmark BSE Sensex declined 26 points at around 17406 while S&P CNX Nifty is lower by 7 points at 5262.



In the domestic currency futures market on the NSE, the front month February contract opened on Friday at 49.34, higher than the spot market rupee. The contract hit an intraday high at 49.46 and registered a low at around 49.33 so far during the day. At the time of writing, the NSE February 2012 USD/INR contract was trading at around 49.38, lower by around 3 paise or 0.07% as compared to previous close at 49.41. Technically, the pair is trading relatively range bound and a move towards 49.50 is likely. On the downside, the USD INR pair could slide towards 49.25 during the day.



 



 

Source: Capital Market