Rupee loses some strength on flat factory output July figure

Indian rupee after opening near a month’s low level has appreciated on Wednesday tracing the positive local equities and overall weakness of dollar against the basket of currencies. However, the Indian currency has lost some strength, post local equities dipped in a knee jerk reaction to the flat factory output numbers for the month of July. Continuing to put forth dismal performance, India’s index of industrial production (IIP), a key measure of industrial output registered a negligible growth of 0.1 per cent in July 2012 at 167.3, way lower than growth rate of 3.7 percent in the corresponding period last year. Meanwhile, dollar hit a four-month low against a basket of currencies on Wednesday, hurt by expectations of more U.S. monetary easing and a warning from Moody's the previous day that it could cut the credit rating of the United States (US).

The partially convertible currency is currently trading 55.26, stronger by 9 paise from its previous close of 55.35 on Tuesday. The currency, so far, has touched a high and low of 55.30 and 55.19 respectively. The Reserve Bank of India's (RBI) reference rate for the dollar stood at Rs 55.52 and for Euro it stood at Rs 70.85 on September 11, 2012. While, the RBI’s reference rate for the Yen stood at 70.99, the reference rate for the Great Britain Pound (GBP) stood at 88.8468. The reference rates are based on 12 noon rates of a few select banks in Mumbai.