DAILY FOREX REPORT FOR 02 JULY 2014

MARKET HEADLINES

Rupee gains on foreign flows, RBI's absence
Rupee was trading at 60.11/12, marginally above its previous close of 60.17/18 on foreign inflows and absence of any central bank intervention so far, dealers said. Overseas investors bought Indian shares worth $214.42 million on Monday, their biggest single-day buying since June 12, provisional exchange data showed. Also, the pair is tracking losses in the dollar versus other Asian currencies. The dollar wallowed close to seven-week lows against a basket of major currencies on Tuesday, with the greenback pressured by doubts about the strength of the U.S. economic recovery. However, the rupee is expected to continue to remain in a tight range ahead of the federal budget on July 10 with the geo-
political situation in Iraq and central bank intervention at 60 level being closely monitored. The pair is seen holding in a 60 to 60.40 range during the session.

Rupee steady after initial gains; trades at 60.18
The rupee trimmed its initial gains and was quoted steady at 60.18 per dollar on mild demand for the US currency from banks and importers. The domestic unit opened higher at 60.10 per dollar as against the last closing level of 60.17 at the Interbank Foreign Exchange market on initial selling of the greenback by banks due to weakness of dollar in overseas market. However, it trimmed its initial gains and dropped to 60.20 per dollar on demand for the American currency from importers and banks before quoting at 60.18 per dollar at 1000 hours. It moved in a range of 60.10 and 60.20 per dollar during the
morning trade. In New York market, the dollar posted second-quarter losses against nearly all major rivals yesterday, with the exception of the euro. Meanwhile, crude oil prices rose in Asia today as dealers made the most of a weakening dollar while keeping an eye on continuing fighting in Iraq, analysts said. US benchmark West Texas Intermediate for August delivery rose 23 cents to USD 105.60 while Brent crude gained eight cents to USD 112.44 in late-morning trade. The Indian benchmark 30-share index Sensex rose further by 107.26 points, or 0.42 per cent, to 25,521.04 at 1000 hours.

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