Published: 7 May at 3 PM Tags: Euro, Dollar, America, Eurozone, USA, China, Germany, India,
After declining against the US Dollar for the past three days the Indian Rupee enjoyed a modest rebound today.
Yesterday the Rupee slumped to an almost 7-day low as demand for the US currency from state run banks remained high. The increased Dollar demand has largely been attributed to the Indian governmentâ€™s defence purchases.
The Rupee lost ground on Friday after the Indian central bank met expectations for a rate cut of 25 basis points but delivered a hawkish statement, causing one industry expert to comment: â€˜I expect the Rupee to move in a 53.60-54.80 band for now in the absence of any global developments or policy announcements. However, if the global dollar strength persists and 54.80 gets breached, the Rupee may see a sharp downside.â€™
Indiaâ€™s central bank intimated that there was little scope for further rate cuts, an assertion which inspired negative Rupee sentiment.
However, since then the US Dollar has weakened as positive German data heartened investor appetite for riskier-assets.
The Rupee also benefited as several foreign banks sold off the â€˜Greenbackâ€™, an action which was thought to be connected to Qatarâ€™s 1.26 billion Dollar purchase of a 5 per cent stake in Bharti Airtel Ltd, an Indian telecoms company.
Pramit Bahmbhatt of Alpari Financial Services noted: â€˜Today rupee traded low taking cues from the dollar which traded weak against the major currencies mainly against the Euro, also the Indian equity markets traded strong throughout the day and closed up by over one per cent which strengthened the rupee.â€™
The Rupee is currently trading in the region of 54.0900 against the US Dollar.
The Yuan enjoyed its most significant advance for the year following comments issued by Chinaâ€™s Premier Li Keqiang.
After Li Keqiang vowed to develop a means of allowing investment capital to pass freely in and out of China the Peopleâ€™s Bank of China raised the daily reference rate by 0.05 per cent to 6.2083 just short of the record levels seen last week. The Yuan is now trading in the region of 6.1539 Yuan per Dollar.
Yesterday the currency achieved an almost 20-year high of 6.1521.
The currencyâ€™s 0.2 per cent advance was the largest one-day gain seen this year.
As economist Nathan Chow stated: â€˜China is moving forward with exchange-rate reform and making the Yuan more globally used. There have been bets the trading band will be widened, giving more room for appreciation. Yet, itâ€™s unlikely to happen soon as that might fuel speculation and worsen inflation.â€™
So far this year the Yuan has strengthened by 1.2 per cent.
As of Tuesday, 7th May 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.184, GBP USD exchange rate was 1.5481, GBP CNY exchange rate was 9.5274, and GBP INR exchange rate was 83.7606.