MUMBAI (Commodity Online):Rupee opened strong on Friday, July 22, 2011 tracking strength in the euro after the European leaders announced a comprehensive plan on Thursday to solve Greece's debt crisis and prevent spread of financial contagion in the region.
The domestic currency climbed alongside its regional peers and opened higher by almost 14 paise at Rs. 44.37 against the US dollar. The local unit registered a low of 44.41, marginally erasing initial spike. Surging local shares are also expected to keep the domestic unit propped up.
In the spot currency market, rupee was last seen trading at 44.37, higher by around 14 paise or 0.31% as compared to previous close at 44.51.
The European unit rose against the dollar on Thursday after European finance ministers agreed on a new aid package for Greece and assured further intervention into Greece and other struggling European states. The single common currency had begun edging up since early this week on expectation that the euro zone summit held on Thursday would provide some relief the mounting debt worries.
Euro surged late yesterday post the summit to a two and half week high against the US dollar and registered a week's high against most of the other major currency units. The 17 nation common currency soared almost 1.4433 versus the greenback after having registered a low of 1.4013 at the start of the week. The euro also advanced against the Swiss franc and Japanese yen to hit fresh session highs.
Bulls took charge as the key domestic benchmark indices surged as Asian shares rose on news of a second bailout for Greece and on plans to prevent sovereign-debt contagion from spreading to other European countries.
FIIs sold Indian shares worth a net Rs 577.64 crore on Thursday, as per provisional data from the stock exchanges. Domestic institutional investors (DIIs) bought shares worth Rs 408.36 crore on that day. At the time of writing, India's key benchmark BSE Sensex is up 258.67 points at 18694.90 while S&P CNX Nifty also gained 70.20 points at 5611.80.
In the domestic currency futures market on the NSE, the front month July'2011 contract opened on Friday at 44.42, higher than spot market rupee. The contract hit an intra day high at 44.43 and registered a low at around 44.38 so far during the day.
Meanwhile, euro- rupee contract surged 1.19% at 63.90 from 63.15 in the previous session. The JPY/INR contract inched down 0.06% to 56.41 from 56.44 while the GBP/INR contract is also up 0.44% at 72.33 from 72.02 at close on Thursday.
At the time of writing, the NSE as well as MCX July 2011 USD/INR contract was trading at around 44.38 down around 16 paise or 0.36% as compared to previous close at 44.55. Rupee on the contract will likely find an intra day support at around 44.32.
