The rupee firm and quiet
21 August 2004
The rupee opened firmer at 46.29 against the dollar probably reflecting the confidence in RBI support for the currency. Mumbai markets were closed for Parsi New Year on Friday and thus the trading volumes were low. Today being Saturday and no major releases expected the trading was quiet.
is a lurking fear that oil will touch a high of $50
per barrel which might see some action and movement
in the market. Most currencies are becoming more and
more immune to the same though.
The dollar strengthened against the euro in lifeless trading throughout the London and US trading session. The dollar is simply coming off extremely oversold conditions against the euro. No news is good news for the dollar, since there is no compelling reason for the euro to break out of its current range.
The lack of significant US economic data until Wednesday next week will encourage optimists to step in once again and put a bit of downward pressure on the euro. Meanwhile, there were three pieces of economic data released from the Eurozone yesterday - French GDP, French current account and Eurozone trade data. France's Q2 GDP was confirmed at 0.8 per cent, while the current account deficit narrowed from (-) EUR 729 million to (-) EUR 512 million in June. The Eurozone's trade surplus narrowed from EUR 7799 million to EUR 8710 million, while the current account surplus became a deficit of (-) EUR 500 million in the same month. The most important release next week from Eurozone is the German IFO Survey of Business sentiment due out on Thursday.
The British pound gave back everything it gained, as range trading remained the predominant theme against the dollar. The most important releases next week from the UK are the second release of Q2 GDP and the Gfk consumer confidence survey, both of which are due out on Friday. So far, sentiment in the UK has been negative for the last six months. There is no reason for a divergence from the current trend.
The yen has strengthened against the dollar. The extended gains were helped by a stronger than expected tertiary industry index, which reported increased activity in the month of June. Yen has now become interestingly immune to the oil hikes owing to the statement made by Takenaka, the Japanese commerce minister saying the oil hike is a temporary feature and will not affect the yen in the long run. Though, oil is slowing creeping towards $50/barrel, the yen continues to strengthen. In the week ahead, there is a lot of significant Japanese economic data, including trade data, worker's spending and inflation.