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Rupee erases early gains tracing euro on Wednesday

21 Sep 2011 Evaluate

Indian rupee erased all the early gains to end weak on Wednesday. Dragged by the choppy domestic equities and a euro retreat, the Indian currency again tumbled to make a fresh two year's low. Risk aversion, mainly ahead of the outcome of US Federal Reserve’s meeting enhanced the demand for safe heaven dollar, weighing on the Indian currency. The expectation is that Fed will announce a fresh effort to invigorate the faltering US recovery by pushing long-term borrowing costs lower through rebalancing of its $2.8 trillion portfolio of bond holdings towards longer-term securities.

Finally the rupee ended 48.30, weaker by 24 paise from its previous close of 48.06 on Tuesday. It touched a high and low of 48.33 and 47.83 respectively. The Reserve Bank of India's reference rate for the dollar stood at 47.89 and for Euro it stood at 65.63 on September 21, 2011. While, the RBI's reference rate for the Yen stood at 62.80 and the reference rate for the Great Britain Pound (GBP) stood at 75.3094. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

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