FOREX REPORT FOR 06 AUGUST 2014

MARKET HEADLINES
 

Rupee up 2 paise against US dollar in trade
The rupee gained two paise to 60.91 against the US dollar in early trade at the Interbank Foreign Exchange market today on increased selling of the American currency by exporters ahead of RBI's policy meet. A higher opening of the domestic equity market also supported the rupee but the dollar's rise against other currencies overseas capped the gains, dealers said. Yesterday, the rupee recovered from four- month low by rising 25 paise in its biggest gain in three weeks to end at 60.93 against the Greenback as shares soared ahead of the RBI's bi-monthly policy meet and exporters offloaded dollars. Meanwhile, the benchmark BSE Sensex rose 61.03 points, or 0.24 per cent, to 25,784.19 in early trade.


Euro weak ahead of ECB meeting
The euro stayed weak against the dollar in Asia on Tuesday as investors awaited eurozone data and a monthly policy meeting of the European Central Bank (ECB). The euro bought $1.3416 in Tokyo midday trade against $1.3421 in New York late Monday while buying 137.63 yen against 137.64 yen in US trade. The dollar was at 102.58 yen against 102.56 yen in US trade. The eurozone services purchasing managers' index and retail sales to be released later Tuesday are set to "confirm the on-going improvement in domestic demand," Credit Agricole said in a note. The ECB is widely expected to hold fire on further easing measures when it holds a policy meeting on Thursday. But it comes amid continued concerns at the low level of inflation in the eurozone with any hints at more stimulus likely to spark euro selling. The bank has stayed pat since it launched unprecedented stimulus measures in June, including taking one of its key interest rates into negative territory. Although the eurozone came out of recession last year and unemployment has fallen slowly, the Ukraine crisis and Western sanctions against Russia present a wild card of uncertainty.

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