Rupee range bound, while dollar picks up
28 July 2004
The Rupee though weak at 46.29 has been range bound between 46.20 and 46.30 due to continued support selling of dollars by the PSU banks though the dollar demand seems to have gone up possibly due to the month end buying.
exceptionally robust US consumer confidence report,
which improved from an upwardly revised 102.8 to 106.1
has boosted the dollar up. An improving labour market
and solid home sales has bolstered optimism towards
the dollar and substantiated Greenspan's claim suggesting
that the outlook for the US economy will remain rosy.
With the US durable goods report and the Fed's Beige Book being released tomorrow we will get more insight into the US economy. So a possible up movement is on the cards. The Beige Book report, which is published two Wednesdays before every Federal Reserve Monetary Policy meeting and covers the health of each of the Fed's regions is expected to show broad based improvements.
The British pound has been unable to escape the effect of the up moving dollar. The dollar went from 1.8450 levels to a 250 points stronger 1.8200 and now has retraced to 1.8235. On Monday, Banco Santander Central Hispano announced that it plans to acquire Abbey National PLC for GBP 8.3Bln. The deal, positive for the pound and negative for the euro, would create the world's tenth largest bank and has already sparked speculation of other possible takeovers of UK banks.
The dollar jumped from 109.50 to a steep 111.50 levels. Given that the data scheduled for release from Japan this week is expected to be negative, with a forecasted drop in industrial production growth, consumer prices and housing starts, the dollar could register some more near term gains against the yen.