DAILY CURRENCY UPDATE FOR 21 JAN 2015

Rupee down 11 paise to 61.82 vs dollar in morning trade
The rupee dropped 11 paise to trade at 61.82 against the dollar in late morning deals today on sustained demand for the US currency from banks and importers amid higher greenback overseas. Earlier, the rupee resumed lower at the 61.82 per dollar as against yesterday close of 61.71 at the Interbank Foreign Exchange market. Later, the rupee was quoted at 61.73 on bouts of dollar selling by banks and exporters before sliding again to its opening level of Rs 61.82 at 1045 hrs. It hovered in the range of 61.84-61.73 per dollar during the morning trade. Meanwhile, the BSE Sensex were trading higher by 159.35, or 0.56 per cent, to 28,421.52 in late morning trade. paise to 61.77 a dollar in early trade today at the Interbank Foreign Exchange market as the US currency strengthened overseas. Dealers said besides dollar's gains against other currencies overseas, increased demand for the American unit from importers put pressure on the rupee but a higher opening in the domestic equity markets capped losses.The rupee had jumped by 16 paise to end at over two-month high of 61.71 against the greenback on good inflows in local markets and sustained dollar sales by exporters.Meanwhile, the benchmark BSE Sensex was trading higher by 112.16 points, or 0.40 per cent, at 28,374.17 in early trade.

Relief over China growth pushes dollar to 1-week high versus yen
The dollar hit a one-week high against the yen on Tuesday after China growth data was not as bad as many had feared, curbing demand for the safe-haven Japanese currency.The greenback rose 0.6 per cent to 118.25 after touching a one-week high of 118.54. Forecasts from the IMF showing that the United States was on a different growth trajectory than most other major economies also bolstered sentiment towards the dollar, while some talk the Bank of Japan may ease policy added to pressure on the yen. The euro was under pressure ahead of a possible announcement of a money-printing programme by the European Central Bank as early as at its meeting on Thursday.The euro's weakness pushed the Danish crown back towards recent two-and-a-half year highs. The impact on the crown from Denmark's interest rate cut deeper into negative territory on Monday proved fleeting, with investors expecting it to reduce rates further if the ECB announces a QE programme this week. Speculation was also growing that the currency's long-standing peg to the euro may be threatened in coming days."The Danes will have to offset the impact from further ECB action by taking rates deeper into negative territory," said Jeremy Stretch, head of currency strategy at CIBC World Markets. "That will be the path of least resistance for the Danish central bank." The euro was trading flat at 7.4345 crowns, easing back from a high of 7.4370 struck immediately after the Danish central bank cut interest rates to -0.20 percent on Monday. The euro had struck a 2-1/2 year low of 7.43 on Monday.Against the dollar, the euro was trading 0.2 percent lower at $1.1580, having struck a 11-year low of $1.14595 on Friday. Sources have told Reuters the ECB may adopt a hybrid approach to bond buying that would include buying debt and sharing some of the risk across the euro zone, while national central banks make separate purchases of their own. The programme might be limited in size to 500 billion euros ($579.95 billion).

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