DAILY FOREX REPORT FOR 30 JUNE 2014

MARKET HEADLINES
 

Rupee up by 3 paise; wedged in tight band
The rupee was trading up at 60.11/12 versus its Thursday's close of 60.14/15 with the dollar's losses against other majors and Asian currencies getting offset by demand for the greenback from importers. The pair had traded in a tight 60.08 to 60.15 band so far in the session. Importers particularly oil firms were seen buying dollars to meet month-end import commitments. Most Asian currencies were trading stronger against the dollar. The index of the dollar against six major currencies down 0.06 per cent. Traders will monitor the domestic share market for clues on the direction of foreign fund flows. Shares are trading largely flat.

Rupee ends weak on importer dollar buy, FX inflows good
The rupee ended weak on Thursday, dragged down by month-end importer dollar demand and lower stocks, while uncertainty over Iraq turmoil kept traders cautious. However, good dollar inflows prevented the unit from sliding sharply despite domestic stocks falling by nearly 1 per cent. Foreign funds have bought shares worth $2.3 billion and debt worth $2.90 billion so far in June, taking total
inflows in the year to $9.9 billion and $10.5 billion, respectively. "Foreign investors are expecting major reforms in the budget and so they are bullish in the long term," said Uday Bhatt, senior manager at UCO BankBSE -1.09 % in Mumbai. Some residual dollar inflows related to Reliance Communications' share sale could have come in, dealers said.Reliance Communications LtdBSE -0.34 % on Wednesday raised $804 million by selling shares in what is the single biggest equity issue since the pro-business Narendra Modi government took office. 
The rupee ended at 60.14/60.15 to the dollar after trading in a narrow 60.08-60.20 band compared with Wednesday's close of 60.1250/1350. Brent crude dropped under $114 a barrel on Thursday as most of Iraq's oil output remained unaffected by the militant insurgency in the country, although worries over the conflict kept a floor under prices. However, Asian currencies were up with South Korean won leading the gains as a disappointing contraction in the U.S. economy during the first quarter raised expectations that the Federal Reserve may not hurry to increase interest rates. Shares ended lower, led by fall in oil explorers after the government deferred a decision to hike prices of locally produced gas, while the expiry of monthly derivatives contracts also weighed on sentiment. In the offshore non-deliverable forwards, the one-month contract was at 60.40, while the three- month was at 60.98.

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