Millennium Post

Re rebounds 53p to 60.19 per $ on lower than expected CAD

Sharp moderation in current account deficit (CAD) and strong local equities helped the rupee come off from its overnight all-time closing low to end higher by 53 paise at 60.19 against the Greenback.

Fresh dollar selling by exporters on hopes of fall in the USD after downward revision to US first quarter GDP growth calmed concern about US monetary policy as it may delay to plan to reduce bonds purchasing programme.

However, sustained selling by foreign funds in domestic stocks amid better dollar overseas capped the rupee rise.At the Interbank Foreign Exchange (forex) market, the domestic unit resumed higher at 60.45 a dollar from previous all-time closing low of 60.72.
Later, it touched a low of 60.63 only to bounce back to a high of 60.10 before concluding at 60.19, showing a rise of 53 paise or 0.87 per cent. On Wednesday, it had plunged by 106 paise or 1.78 per cent.

The dollar index was up by a mere 0.02 per cent against a basket of six major global currencies ahead of the release of US consumer spending and labor-market figures which could affect the Federal Reserves policy outlook.

India's current account deficit moderated sharply to 3.6 per cent for March quarter from the 6.7 per cent in the previous quarter but overall current account deficit for FY13 is at 4.8 per cent, versus 4.2 per cent in FY12.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said,'Rupee bounced back from Wednesday’s fall and managed to trade strong against dollar taking cues from local equity markets which closed up by over one & half per cent. Rupee has already depreciated over 12 pct in last 2 months and is hoped to go down further to the 62 levels. On FridayIndia will come out with its Foreign Debt and Forex Reserve data which will clear the picture regarding current account deficitissue. Trading range for the spot Rupee is expected to be within 59.90 60.60.’
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