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Rupee resumes its southbound journey after Fed disappoints

02 Aug 2012 Evaluate

Indian rupee, after taking a breather in the previous session, resumed its southbound journey, tracking a global dollar rally after the U.S. Federal Reserve refrained from announcing any additional stimulus, leaving global investors focused on a European Central Bank meeting later on Thursday for any action that could revive their appetite for risk. The speculation has been rife that ECB could renew its bond buying programme in order to bring down borrowing costs for Italy and Spain to head off a brewing debt crisis, a move if materializes could glorify the appeal of emerging market currencies, including that of local unit.  Further, negative local equities along with weaker regional counterparts also added to the pressure of Indian currency.

The partially convertible currency is currently trading at 55.75, weaker by 10 paise from its previous close of 55.65 on Wednesday. The currency has touched a high and low of 55.82 and 55.65 respectively. The Reserve Bank of India's (RBI) reference rate for the dollar stood at Rs 55.48 and for Euro it stood at Rs 68.30 on August 1, 2012. While, the RBI’s reference rate for the Yen stood at 71.01, the reference rate for the Great Britain Pound (GBP) stood at 86.9411. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

Date1US$1GBP

August 1, 2012

55.4886.9411

July 31, 2012

55.80 87.6672
(RBI-reference rate) 

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