Mumbai: The rupee recovered initial losses and ruled quietly steady against the US dollar in late morning trade on Monday, 10 September, on comfortable dollar supplies amid weakness in equity markets.
In dull trade at the Interbank Foreign Exchange (forex) market, the local currency resumed weak at 40.75/77 per dollar from Friday’s close of 40.69/70, but later bounced to 40.68/69 a dollar in late morning deals.
The rupee opened lower by about six paise following weak Asian markets this morning, forex dealers said.
However, it staged a smart recover immediately on the back of comfortable inflows from Foreign Institutional Investors into equity markets last week, they added.
Mumbai, 10 September: Rupee eased today as weak US data triggered a selloff in Asian equity markets and sparked concerns about a reversal in risk appetite, which might prompt overseas investors to sell the local unit.
At 9:45 a.m. (0415 GMT), the partially convertible rupee was at $40.707/715, slightly off Friday’s (7 September) close of 40.6875/6975, but moving up from an early low of 40.77. It hit a nine-year high of 40.20 in July.
“The rupee has not dropped as much as some people were expecting this morning, though the market will remain cautious,” said the chief dealer with a corporate, who expects the rupee to trade in a 40.77-40.40.65 range today.
US jobs data showed companies cut 4,000 jobs in August for the first time in four years, suggesting that a credit squeeze stemming from problems in the US subprime mortgage market is beginning to stifle growth in Asia’s top export market.
Asian stock markets fell today, with exporters hit hard as the dollar slumped to a 15-year low against a basket of major currencies on concerns the US economy may be heading into a recession.
The rupee has gained about 8.5% this year powered by robust overseas investments, which have helped it become Asia’s best performing currency against the dollar.
Foreign funds bought a net of nearly $540 million of Indian shares in the first four trading sessions of September, after being net sellers of about $1.9 billion last month.