It is a 1% fall for the rupee today. That is basically the dollar has become expensive by about 55-60 paise that works about to a 1.2% fall for the rupee. The reasons are not far to seek, it was always expected that way after that very sharp rally we have seen in the dollar across all currencies major as well as Asian currencies. If you remember the dollar went from 1 point to 4 to the euro all the way to 1.43 and in the last say since Friday and Thursday it has pulled back to about 1.38. If you look at the euro-dollar currently that is a very strong pullback you are seeing in the dollar and that is having its ramification across all currencies as well as the stock market ofcourse have declined in India as well. The banks which were shorting the dollar left right and center in India are now covering up, that is the major reason why the dollar has become expensive.
Wee bit of oil importer buying is also there and as the dollar becomes more expensive than 47.60 some exporters are always tempted to sell a little bit since they are sitting on such huge losses. So that would always come in but basically unless the dollar really turns globally and continues its weakening trend or trajectory maybe for the moment you are going to see a little more losses for the rupee.
On bond markets
They are suffering from the same plight, the global cues. In the US markets after that non farm payroll numbers came in strongly the feeling was that if growth is picking up with so much of cash in the system there could be inflation and therefore Fed rate hike sometime later on in 2009 all these complex of thoughts had lead to the rise in US bonds. Indian bonds have followed suite. A lot of negativity in the Indian markets even otherwise there is the Budget, possible extra borrowing. So although there is plenty of cash and that keeps bonds from falling too much overall it is a negative bias.
