MARKET HEADLINES
Rupee at 60.29 vs US dollar; oil prices watched
The rupee was trading weaker at 60.2900/2950 versus its previous close of 60.08/09, tracking high global crude prices as crisis in Iraq continues. Brent crude held near $115 a barrel on Friday, close to a nine-month high, and was headed for its second weekly gain on increased risks of disruption to supply from Iraq. The rupee and Indonesia's rupiah led losses among regional units, reflecting the risk that high oil prices pose to both countries' current account and inflation rate. The rupiah has lost 1.4 per cent against the dollar this week and the rupee has fallen 0.8 per cent, according to Thomson Reuters data. Market closely watching stocks as investors cautious and reluctant to take big bets on concerns over violence in Iraq. The pair is seen trading in a 60.00-60.50 range during the session.
China's yuan rises for 2nd day on stronger midpoint, improved sentiment
SHANGHAI: China's yuan rose modestly against the dollar for the second day on Friday, buoyed by a marginally stronger central bank midpoint and improved sentiment after the currency's recent rebound, traders said. Spot yuan stood at 6.2286 per dollar at midday, up 0.02 per cent from Thursday's close, after the central bank fixed its midpoint at 6.1524, up 0.01 per cent from Thursday. The yuan has rebounded 0.5 per cent since the end of April after slumping 3.3 per cent in the first four months of this year as the People's Bank of China (PBOC) engineered a depreciation of the currency to deter speculators betting on non-stop yuan appreciation. More recently, however, the PBOC has fixed its midpoint generally stronger to signal that it may feel the depreciation earlier in the year was enough to deter punters, traders said. China's healthy export growth in May, which resulted in the country's biggest trade surplus in five years, also offered the central bank an easy excuse to let the yuan's depreciation take a pause, traders said. A Reuters poll of 11 currency analysts showed sentiment on the yuan turned bullish for the first time in four months, fueled by a change of the PBOC's tactics. Still,
traders said the PBOC's recent midpoints have not sent signs that it is guiding yuan to resume appreciation.
For instance, the central bank set three sharply lower midpoints in the first three days of this week as it moved to dampen speculation that it would allow the yuan to resume appreciation after the currency staged its biggest weekly rise of 0.6 per cent since late 2011 last week. The yuan's medium- term trend will more or less determined by the performance of China's exports and how much trade surpluses it will record in June and in the third quarter, traders said. "There has been no clear trend for the yuan's movements of late despite its recent rebound," said a trader at a Chinese commercial bank in Shanghai. "The market is awaiting fresh signals from the PBOC's midpoint and coming trade data
to gauge the yuan's next possible direction."
Rupee at 60.29 vs US dollar; oil prices watched
The rupee was trading weaker at 60.2900/2950 versus its previous close of 60.08/09, tracking high global crude prices as crisis in Iraq continues. Brent crude held near $115 a barrel on Friday, close to a nine-month high, and was headed for its second weekly gain on increased risks of disruption to supply from Iraq. The rupee and Indonesia's rupiah led losses among regional units, reflecting the risk that high oil prices pose to both countries' current account and inflation rate. The rupiah has lost 1.4 per cent against the dollar this week and the rupee has fallen 0.8 per cent, according to Thomson Reuters data. Market closely watching stocks as investors cautious and reluctant to take big bets on concerns over violence in Iraq. The pair is seen trading in a 60.00-60.50 range during the session.
China's yuan rises for 2nd day on stronger midpoint, improved sentiment
SHANGHAI: China's yuan rose modestly against the dollar for the second day on Friday, buoyed by a marginally stronger central bank midpoint and improved sentiment after the currency's recent rebound, traders said. Spot yuan stood at 6.2286 per dollar at midday, up 0.02 per cent from Thursday's close, after the central bank fixed its midpoint at 6.1524, up 0.01 per cent from Thursday. The yuan has rebounded 0.5 per cent since the end of April after slumping 3.3 per cent in the first four months of this year as the People's Bank of China (PBOC) engineered a depreciation of the currency to deter speculators betting on non-stop yuan appreciation. More recently, however, the PBOC has fixed its midpoint generally stronger to signal that it may feel the depreciation earlier in the year was enough to deter punters, traders said. China's healthy export growth in May, which resulted in the country's biggest trade surplus in five years, also offered the central bank an easy excuse to let the yuan's depreciation take a pause, traders said. A Reuters poll of 11 currency analysts showed sentiment on the yuan turned bullish for the first time in four months, fueled by a change of the PBOC's tactics. Still,
traders said the PBOC's recent midpoints have not sent signs that it is guiding yuan to resume appreciation.
For instance, the central bank set three sharply lower midpoints in the first three days of this week as it moved to dampen speculation that it would allow the yuan to resume appreciation after the currency staged its biggest weekly rise of 0.6 per cent since late 2011 last week. The yuan's medium- term trend will more or less determined by the performance of China's exports and how much trade surpluses it will record in June and in the third quarter, traders said. "There has been no clear trend for the yuan's movements of late despite its recent rebound," said a trader at a Chinese commercial bank in Shanghai. "The market is awaiting fresh signals from the PBOC's midpoint and coming trade data
to gauge the yuan's next possible direction."
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