The Rupee
appreciated 12 paise to 66.42 against the US dollar in trade on
Monday ahead of the domestic consumer price inflation data scheduled
later for the day, and the two-day US Federal Reserve policy review
starting September 16.
The domestic
currency had logged fifth week of consecutive fall last week. The
local unit had slipped 8 paise during the week to close at 66.54 per
dollar after touching a 2-year low of 66.86 on persistent dollar
demand from banks and importers.
There are fresh
hopes that the the US Fed would further delay the interest rate hikes
amid weak outlook for the global economy. Any rate hike by the US
Fed, nonetheless, may trigger a knee-jerk reaction in the currency
markets, with emerging market equities, likely to be at the receiving
end.
Dollar index, which
tracks the dollar movement against a basket of six major world
currencies, stood at 95.09, down 0.1 per cent.
The Rupee's
fundamentals are vastly improved compared to 2013. Forex reserves are
at all-time high and India is likely to run a balance-of-payments
surplus this year. We expect a 3-5 per cent annual depreciation of
the rupee over the next few years," said Mihir Vora, Director &
Chief Investment Officer, Max Life Insurance.
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