Rupee slides again
17 August 2004
46.40, the rupee was weak against the dollar today.
The slip showed because of reasons like a rise in demand
for the dollar from banks in anticipation of demand
from oil importers. The rupee is expected to fall further
in response to an expected trade deficit because of
rising oil prices affecting the import bills. Exporters,
too, are skeptical and hoarding their dollars.
dollar itself has been week thanks to the US retail
data and its wide negative trade deficit. The US capital
inflow data release was heartening but was compensated
by a weak US Empire State Manufacturing Survey. The
market is now looking forward to the US consumer price
index (CPI), industrial production and housing start
data all due tonight.
The markets expect Germany's monthly ZEW survey of economic sentiment and industrial production. The ZEW is expected to come in much softer this month as exports decreased 5.8 per cent in the June and oil prices continue to hurt the profits of German corporations. Until then the euro will remain fairly undisturbed. Any positive indication will help it react to the weakening US currency.
Japanese yen gained against the dollar retracing a sharp
fall. Following Venezuelan President Chavez's referendum
victory, it found some relief as oil prices receded.
Japan was hit by the oil price surge, with GDP growth
slipping to 1.7 per cent in Q2.
The British pound gave back some of its gains. The market expects the RICS survey and the consumer spending data to be released this Thursday. The RICS is expected to echo the Bank of England's statement that house prices have peaked and will continue to slow in the months ahead. Consumer spending is also expected to decline. All indicating, slowing down of the UK economy.