Positive sentiment gears rupee
13 August 2004
continues to feel positive with the expected inflow
of foreign funds, on account of the TCS IPO. Today the
rupee touched 46.19. The positive sentiment is also
attributed to the strong support of the RBI. Inflation
of 7.51 per cent and the slow economic reforms are for
now in the background and will deflate the rupee's rise
only if TCS is not able to attract enough funds from
rising crude oil price is another bothering feature
of the world economy today. They especially cause concern
to the rupee as we import about 70 per cent of the oil
we use and it constitutes about 30 per cent of our import
bill. Currently, oil price has reached $45 a barrel.
Even Saudi Arabia's announcement of spare oil has failed
to curb price gains. The global economy and the world's
central bankers are now at the mercy of oil.
The US retail sales data released being below expectations has caused the dollar to weaken against other currencies. Greenspan's words of hope have not been quantified this week.
developments in the Euro zone today failed to garner
much momentum for the euro. French consumer spending
increased 4.2 per cent. The French economy is sending
more positive signals than that of Germany. The euro
had a brief spike up reaching 1.2202 following the weak
US retail sales report.
dovish inflation report released by the Bank of England
on Wednesday has put a bias on the pound. The British
pound is now at 1.8179 up from 1.8135. This move also
reflects the recent dismal US retail sales data. Until
any further data comes in which is not expected this
week the sterling might just rally in the range.