DAILY FOREX REPORT UPDATES FOR 07 JAN 2016

Rupee pares initial losses, still down 11 paise vs dollar

The rupee pared its initial losses but was still down by 10 paise at 66.70 against the American currency in late-morning deals on sustained bouts of dollar demand from importers amid volatile equities. Earlier, the rupee resumed lower at 66.69 as against last yesterday's closing level of 66.60 at  the Interbank Foreign Exchange (forex) market. Later, it fell on heavy bouts of dollar demand from importers to 66.82 before quoting at 66.70 at 1030 hours. The domestic unit moved in a range of 66.69 and 66.82 during the morning deals. Overseas, the US dollar traded mostly higher against major rivals in early trade, despite the Japanese yen vaulting to a near three-month high against the dollar and multi-month highs versus other currencies as investors sought shelter in low-risk assets after weak economic news from China and a possible nuclear test in North Korea.

 

Offshore Chinese yuan plunges to five year low against dollar

The Chinese yuan plunged to a five-year low in offshore trading and the gap between it and its mainland counterpart widened sharply on Wednesday, reflecting growing expectations of further weakness in the currency as China's economy slows and capital outflows accelerate amid a stock slump. The offshore yuan slumped to 6.6650 against the dollar, the lowest rate since the last quarter of 2010. The onshore yuan rate was 6.5418 against the dollar. The latest trigger for the slump came after the People's Bank of China (PBOC) set the official dollar/yuan midpoint rate at 6.5314, the weakest fixing since 2011. The fix represented a 0.22 percent decline from the previous session, a faster pace than witnessed recently.