RUPEE: Dips Back Below Rs 53/$; Inflation In Store
The Indian rupee extended its slide to the new week commencing lower on Monday, October 15, 2012 as choppy local shares and a sliding euro overseas weighed down the domestic unit. Rupee edged lower on Friday to post its biggest weekly loss in three-and-a-half months. The domestic currency opened lower by 23 paise at Rs 53.04 to a dollar and dipped to a low of 53.10 so far during the day. Moreover, inflation data due today is going to be crucial for market participants in firming opinions about whether or not the central bank will lower key interest rates later this month. In the spot currency market, the Indian unit was last seen trading at 53.06, lower by around 25 paise or 0.47% as compared to previous close at 52.81.
Risk related assets mostly declined early today on growth concerns ahead of the third-quarter corporate earnings season, lifting the safe-haven dollar. Meanwhile, euro slipped further against the dollar in early Asian trades, as investor's awaited clarity on when Spain would request a bailout to shore up its battered finances. The euro was currently quoting at $1.2905 and dipped to a low of $1.2890 at one point.
A bout of volatility was witnessed in initial trade as key benchmark indices trimmed losses after slipping into the red after a positive start. Asian stocks edged lower on Monday, with concerns about Europe keeping investors sidelined amid some mixed signals on the state of the Chinese economy. Foreign institutional investors (FIIs) bought Indian shares worth a net Rs 201.16 crore on Friday, 12 October 2012, as per provisional data from the stock exchanges. At the time of writing, the BSE Sensex was down 31.04 points or 0.17% to 18,644.14 while the S&P CNX Nifty was down 12.85 points or 0.23% to 5,663.20.
In the domestic currency futures market on the NSE, the forward month October contract opened at 53.08 on Monday, October 15, 2012, higher than the spot market rupee. The contract hit an intraday high at 53.21 and registered a low at around 53.08 so far during the day. At the time of writing, the NSE October 2012 USD/INR was trading at around 53.14, higher by 25 paise or 0.48% as compared to previous close at 52.89.
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