DAILY FOREX REPORT FOR 26 AUGUST 2014

MARKET HEADLINES
 

China's yuan firms slightly after last week's fall
China's yuan firmed slightly against the dollar on Monday, with technical buying helping to offset a weaker central bank midpoint fixing after the currency's largest weekly loss in two months last week. The People's Bank of China set the midpoint at 6.1653 per dollar prior to market open, down 0.06 per cent from the previous fix. The spot rate is currently allowed to trade 2 per cent above or below the midpoint. The spot market opened at 6.1550 per dollar, and was changing hands at 6.1516 by midday, 0.02 per cent stronger from the previous close.

Rupee hits 3-week high on S&P's fiscal deficit talk
The rupee strengthened on Friday to a three-week high against the dollar after Bloomberg quoted an analyst at Standard & Poor's calling the government's target to lower the fiscal deficit a positive for the country's ratings. "The fiscal policy stance has been a constraining factor for India's sovereign ratings for some time," Bloomberg quoted S&P's associate director of sovereign ratings, Agost Benard, as saying. "If authorities can deliver on their fiscal goals resulting in a lower debt and interest burden that would benefit India's credit fundamentals," he was also quoted as saying. "If authorities can deliver on their fiscal goals resulting in a lower debt and interest burden that would benefit India's credit fundamentals," he was also quoted as saying. The partially convertible rupee rose to as high as 60.3750 per dollar, its strongest level since July 31, but had eased to 60.45/46 by 12:33 pm. It closed at 60.61/62 on Thursday.The government has a fiscal deficit target of 4.1 per cent of gross domestic product for the year ending in March 2015.

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