Forex tips: The rupee dropped 13 paise at 62.32 against the US dollar in early trade today at the Interbank Foreign Exchange due to appreciation of the American currency overseas. Forex dealers said fresh demand for the dollar from importers also weighed on the local currency but a higher opening in the domestic equity market limited the rupee's losses. The rupee had ended 30 paise higher at 62.19 against the American currency in yesterday's trade on sustained selling of dollars by banks and exporters on hopes of foreign capital inflows in view of strong equity market.
Dollar drop tied to dismal jobs data, Easter holiday trade
The dollar weakened further on Monday as it continues to feel the carry-over effects of a disappointing U.S. jobs report from Friday that throws into question the timing for US interest rate increase. Expectations the US Federal Reserve will raise interest rates sometime later this year has fuelled the dollar's rally since mid-2014. Higher US interest rates will put dollar-denominated assets at a yield advantage versus other currencies such as the euro and yen where interest rates are being kept low. European markets remained closed on Monday for the Easter holiday, limiting trading volumes and contributing to the narrow ranges. The euro held above the $1.10 mark, but one strategist sees dollar strength returning. Chalk up the euro's strength to low volumes. It has had stiff resistance at the $1.1050 level, which goes back to the beginning of March. You might have a few people positioning for that move higher in euro but nobody is pounding the table on that and I think it is a sell above $1.10," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York
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