The market had been shut on Friday for banks annual book closing and for a local holiday on Monday.
The Indian rupee commenced strong on Tuesday April 05 2011 returning after a long weekend as investors take cues from previous day s strong buying of Indian shares by foreign investors and sharply lower US dollar yesterday. The market had been shut on Friday for banks annual book closing and for a local holiday on Monday.
Rupee opened higher by 19 paise at Rs. 44.41 per dollar but slipped from thereon owing to a reversal of losses in the greenback versus the euro that led Asian currencies lower. Moreover local shares also edged lower after a firm start dragging the domestic unit to intra day low of 44.47 so far during the day. Rupee on the spot currency market was last seen trading at 44.44 at 10.20 AM IST higher by around 16 paise or 0.36% as compared to previous close at 44.60.
US dollar strengthened in early Asian trades on Tuesday against the euro that fell from a five month peak as investors have already priced in the ECB interest rate hike expectation later this week and remained subdued ahead of it. The European Central Bank is expected to raise rates by a quarter point from a record low of 1 percent at a meeting on Thursday to rein in inflationary pressures. Euro dropped from 1.423 levels yesterday to a low of around 1.4186 and is currently quoting at 1.4200 against the US dollar.
Euro losses versus the greenback however led the Asian currencies lower. The US dollar index which tracks the greenback against a trade weighted basket of six major currencies is higher by around 0.16% at 76.03. Among Asian currencies the Taiwan dollar was down 0.07% at 29.15 the Indonesian Rupiah 0.06% at 8667.50 while the South Korean won dropped 0.27% at 1089.60 as against the US dollar.
Asian stocks were mixed after Japan s Tokyo Electric Power Co. began dumping radioactive water from its crippled nuclear plant. US blue chip stocks eked out small gains Monday. Trading in US index futures indicated that the Dow could fall 14 points at the opening bell on Tuesday. In the domestic currency futures market on the NSE the forward month April USD INR contract opened on Tuesday at 44.58 higher than the spot market rupee.
The contract hit an intra day high at 44.64 and registered a low at around 44.51 so far during the day. At the time of writing the NSE as well as MCX April 2011 USD INR contract was trading at around 44.61 down 15 paise or 0.32% compared to previous close at 44.76. Rupee on the contract will likely find an intra day resistance at 44.68.
