Rupee at 46.40 despite odds
31 July 2004
continued support of RBI to the rupee by its dollar
selling has kept the rupee at 46.40 levels and prevented
a further depreciation.
slowing trend in inflow of foreign funds and heavy dollar
demand of the importers continues to impact the pessimistic
market sentiment. The rupee closed at 46.45, after dipping
to a low of 46.52. Rising global interest rates and
surging oil prices further impede the government's attempts
to attract foreign funds
dollar fell visa vis the euro to 1.2120 owing to a weak
Q2 GDP report and then bounced back and found itself
a 100 points higher at 1.2015 with the Chicago PMI release
at 56.4 in June. The Chicago PMI is often seen as a
barometer for the broader manufacturing sector in the
United States, one that is shrinking, but still carries
importance, especially in an election year.
retail sales increased 1.8 per cent in June, which was
the strongest rise in a year. An improving labour market
and decreasing layoffs have helped boost consumer confidence
in Germany. On the other hand in France the unemployment
rate increased to 9.9 per cent having a negative effect
on French consumer spending.
sterling is currently at 1.8180 levels. All eyes are
on the next week that is to be a big week for UK, as
we have a heavy economic calendar that includes industrial
production, GDP estimate, manufacturing sector PMI and
the Bank of England rate decision. The recent economic
data hints that the BoE will have to hike rates again.
The yen is retracing some of its losses and is found in 111.30 levels. Interestingly, the large number of economic data released last night was not the catalyst for the move higher especially since household spending and housing starts declined. CPI did increase marginally, but primarily as a result of higher oil prices. The yen's gain is attributed to the gains in the Nikkei, which increased 1.88 per cent overnight.