Rupee moves downward, ends at 41.16/17 vs dollar

Rupee moves downward, ends at 41.16/17 vs dollar
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First Published: Thu, Aug 30 2007. 07 10 PM IST
Updated: Thu, Aug 30 2007. 07 10 PM IST
PTI
Mumbai: Strong month-end dollar demand and firm dollar overseas washed out rupee’s initial gains as it ended lower at 41.16/17 against the dollar on 30 August.
In fairly active trade at the Interbank Foreign Exchange (Forex), the rupee opened firm at 41.00/01 per dollar from the last close of 41.1050/1150.
It touched a high of 40.99 in morning deals following firm Asian equity markets, including India, after the release of a letter from the US Rederal Reserve chairman Ben Bernanke on 29 August.
The letter stated that the policy makers are “prepared to act as needed” if financial-market turmoil begins to harm the broader economy.
But heavy month-end dollar demand from state-run banks on behalf of their clients weighed heavily on rupee.
Increased dollar buying by oil refiners to meet their monthly import requirements also partly dampened the rupee sentiment.
Global oil prices firmed up to over $73.5 a barrel in Asian trade on 30 August.
The rupee later turned weak and touched a low of 41.1850 a dollar before ending the day at 41.16/17, down nearly 5.5 paise over previous close.
After couple of days of inflows, foreign institutional investors (FIIs) once again turned net sellers in equity markets, impacting the rupee negatively.
The dollar bounced back more than two yen from intra-day lows on Fed hints on 29 August, even as US equities rallied in New York.
Morning
Mumbai: Taking a cue from strong Asian equity markets, the rupee on 30 August strengthened by three paise against the greenback in morning trade amid a sharp fall in yen against the dollar in overseas markets.
In lacklustre trade at the Interbank Foreign Exchange (forex) market, the local currency resumed firm at 41.00/01 a dollar from overnight close of 41.1050/1150, but later pared the gains due to fresh month-end dollar demand.
The rupee was quoted at 41.07/08 per dollar in late morning deals.
The benchmark Sensex this morning spurted by 207.77 points to touch 15,200.81 on the back of strong global markets, which bounced back with a vengeance after the release of a letter from Federal Reserve chairman Ben Bernanke on 29 August.
The letter stated that the policy makers are “prepared to act as needed” if financial-market turmoil begins to harm the broader economy.
A weaker yen against dollar also aided the rupee sentiment.
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First Published: Thu, Aug 30 2007. 07 10 PM IST
More Topics: Rupee | dollar | foreign exchange | yen | Money Matters |