The Indian rupee slumped to its lowest level in 32 months on Tuesday, November 15, 2011 tracking a pessimistic environment on the global front that pushed up demand for safe haven dollar, pressurizing other Asian currencies. The domestic currency opened at Rs. 50.46 per dollar and dropped to 50.71, a level last seen on 31st March, 2009. Volatile local shares and persistent dollar demand from oil importers also weighed down the domestic currency. Rupee, in the spot currency market, however managed to pare some of the initial losses and was last seen trading at 50.58, lower by around 28 paise or 0.56% as compared to previous close at 50.30. Spike in European yields triggered sharp sell-off in EURUSD pair overnight, benefiting the dollar and in turn hammering Asian currencies that registered a strong start on Monday. Sentiments deteriorated quite considerably during the European and US session, partly due to a disappointing Italian 5-yr bond auction and also on the back of comments from ECB member Weidmann that the ECB must not become lender of last resort for European governments. The single common currency dropped from a high of 1.3808 yesterday to a low of 1.3593 in early Asian trades today. Meanwhile, the DXY Index, which measures the performance of the U.S. unit against a basket of six currencies, is up 0.07%, at around 77.63 levels. Among Asian currencies, the Taiwan dollar is down 0.17% at 30.21, the South Korean won fell 0.39% at 1127.60 while the Indonesian Rupiah lost 0.50% at 9010.00 as against the US dollar. Intraday volatility was witnessed in morning trade as key benchmark indices slipped into the red once again after reversing initial losses to hit fresh intraday highs. The market edged lower to hit three-week lows in early trade. Asian shares fell on Tuesday, as a rise in euro zone bond yields reflected lingering doubts about the ability of politicians in Italy and Greece to push through painful reforms to resolve their debt crises and win market confidence. Foreign institutional investors (FIIs) bought shares worth Rs. 321.62 crore on Monday, as per the provisional data from the stock exchanges. At the time of writing, India's key benchmark BSE Sensex rose around 8 points at 17126 while S&P CNX Nifty is higher by mere 4 points at around 5145. In the domestic currency futures market on the NSE, the front month November 28, 2011 contract, opened on Tuesday at 50.55, higher than spot market rupee. The contract hit an intraday high at 50.83 and registered a low at around 50.53 so far during the day. Meanwhile, euro- rupee contract added 0.04% to 69.03 from its previous close of 69.00. The JPY/INR contract is up 0.32% at 65.83 from 65.52 while the GBP/INR contract gained 0.15% at 80.60 from 80.48 as at close on Monday. At the time of writing, the NSE as well as MCX November 2011 USD/INR contract was trading at around 50.76, higher by around 25 paise or 0.50% as compared to previous close at 50.51.

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