The Indian rupee recovered above the psychological Rs 60 per dollar mark
on Tuesday, July 09, 2013 from its new all time low levels registered
yesterday as the US dollar rally slightly eased and positive local
shares supported. The domestic currency opened higher by almost 91 paise
at Rs 59.70 against the American currency and climbed to a high of
59.65 before dipping back to a low of 60.2525 so far during the day. In
the spot currency market, the Indian unit was last seen trading at
60.20, up around 41 paise or 0.68% as compared to previous close at
60.61.
The local unit rebounded following measures by the central bank and the market regulator to curb speculative trading in foreign exchange derivatives. India's regulators toughened rules for derivatives trading in the currency market in a bid to arrest the steep decline of the rupee, which fell to a record low of 61.21 against the dollar on Monday. The rupee fell to a record low in the previous session, intensifying fears about the funding of the current account deficit and sending policy makers scrambling to find quick fix solutions beyond sporadic interventions. Efforts to contain the rupee's slide highlight the vulnerability of a country dependent on capital inflows to fund a current account deficit that hit a record high of 4.8 percent in the fiscal year ended in March.
Domestic shares rallied in early trades today on firm Asian stocks. Asian shares posted gains on Tuesday, tracking a rally in Wall Street shares spurred by strong U.S. job data last week, but investors were nervous over Beijing's new drive to reform credit to restructure the economy.
Meanwhile, the dollar paused in its rally as investors bought beaten-down currencies such as the Australian dollar on Tuesday, though its broad uptrend is seen intact as the market tries to position for when the U.S. Federal Reserve will start to slow its stimulus.
Source by Commodity Insights
The local unit rebounded following measures by the central bank and the market regulator to curb speculative trading in foreign exchange derivatives. India's regulators toughened rules for derivatives trading in the currency market in a bid to arrest the steep decline of the rupee, which fell to a record low of 61.21 against the dollar on Monday. The rupee fell to a record low in the previous session, intensifying fears about the funding of the current account deficit and sending policy makers scrambling to find quick fix solutions beyond sporadic interventions. Efforts to contain the rupee's slide highlight the vulnerability of a country dependent on capital inflows to fund a current account deficit that hit a record high of 4.8 percent in the fiscal year ended in March.
Domestic shares rallied in early trades today on firm Asian stocks. Asian shares posted gains on Tuesday, tracking a rally in Wall Street shares spurred by strong U.S. job data last week, but investors were nervous over Beijing's new drive to reform credit to restructure the economy.
Meanwhile, the dollar paused in its rally as investors bought beaten-down currencies such as the Australian dollar on Tuesday, though its broad uptrend is seen intact as the market tries to position for when the U.S. Federal Reserve will start to slow its stimulus.
Source by Commodity Insights
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