DAILY FOREX REPORT FOR 10 JULY 2014

MARKET HEADLINES

Rupee trims losses against US dollar; still trading 2 paisedown
The rupee trimmed its initial losses against the American currency but was still trading down by 2 paise to 59.80 in late morning deals on bouts of dollar demand from importers. Earlier, the rupee resumed higher at 59.92 per dollar as against the last closing level of 59.78 at the Interbank Foreign Exchange market. It trimmed the losses to trade at 59.80 per dollar in late morning deals. The local currency moved in a range of 59.93 and 59.80 per dollar. In New York, the dollar was little changed in local trading against major rivals late yesterday following better-than-expected US jobs report last week. Meanwhile, the benchmark 30- share index Sensex was trading higher by 22.58 points, or 0.09 per cent, to 25,604.69 at 1030 hours.

Rupee down 14 paise against dollar in early trade
The rupee weakened by 14 paise to 59.92 against the US dollar in early trade today at the Interbank Foreign Exchange market on high demand for the American currency from importers. Forex dealers said though increased demand for the US currency from importers put pressure on the rupee but a higher opening in the domestic equity market and the dollar's rise against other currencies overseas
capped the losses. Yesterday, the rupee strengthened by 23 paise to close at 59.78 against the US currency after exporters and some banks sold the US currency. Meanwhile, the benchmark BSE Sensex rose 78.30 points, or 0.31 per cent, to 25,660.41 in early trade today.

Euro is not too strong: Luc Coene
The single European currency is not too strong and the European Central Bank should not go beyond its mandate to influence the exchange rate, ECB Governing Council member Luc Coene said in a newspaper interview published on Wednesday. "It is wrong to say the euro is very strong. Just before the financial crisis, we have to remember, the euro pointed towards $1.60," Coene told Belgian newspaper Le Soir. Coene added that it was dangerous to compare the euro to the Swiss franc, where the central bank had intervened to keep the currency low, as the market for francs was much smaller. "The market for euros is so large that one would have to waste considerable financial resources to have a very random result," he said. Coene said that the European Central Bank's mandate was to control interest rates and inflation and that any effect on exchange rates was unintended. "We'll do what we will have to do in terms of monetary politics but we should not go further," he said.

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