Rupee steadies, inflation rises

The rupee corrected its fall today with the RBI backing it by dollar selling. It closed at 46.36 rising from a low of 46.48 after RBI's intervention shielding the rupee from falling further. RBI's backing will send a positive wave to all the traders and build confidence in rupee.

Yesterday's response to the rise in oil prices continued this morning with the US still concerned about its oil supply channels, especially the Russian major and the refinery fire in the US.

The inflation figure announcement of 7.51 per cent has caused the mood to slacken and again dampen the rupee's spirits. Analysts predict a further hike in the inflation.

The euro skyrocketed to 1.2275 levels as the forecasts for July's non-farm payrolls, report pointed a weaker job market with only 32000 jobs being added in July. More jobs seem to have been cut down in the transport sector which is expected to be a fall out of the oil prices. The euro also steeped with bad German industrial data. Euro could face some turbulence on account of possible inflation or slow down of the economy.

The yen is affected by the falling wages that has caused spending to fall for the second consecutive month. Despite being repetitive, the importance of the impact of rising oil prices on the Japanese yen cannot be stressed.