RTTN:Indian Rupee Off 2-week High Against US Dollar
(RTTNews) - The Indian rupee that advanced to a 2-week high of 55.1250 against its US counterpart in the early part of Thursday's domestic trading pared some of its gains at the end of the day's deals.
The rupee pulled back to below 55.31 per dollar as the initial rally in domestic shares stalled and the greenback recouped some of its losses against the euro.
Weak PMI data from China and a dovish U.S. FOMC minutes overnight raised prospects for stimulus in the world's largest economies, which in turn enhanced the value of emerging market assets in the morning.
Besides, a Finance Ministry decision on relaxing the External Commercial Borrowings (ECB) norms to allow foreign investors to invest up to $5 billion in rupee bonds also lifted the domestic unit.
Indian shares ended largely unchanged on Thursday, as political tensions over the CAG report on coal block allocation and lingering worries about inflation and the interest rate outlook offset positive global cues.
Paring most of its early gains, the benchmark 30-share Sensex ended the session up 3 points or 0.02 percent at 17,850, while the broader Nifty index rose by 3 points or 0.05 percent to 5,415.
Investors are still waiting for some policy action from the government to step up growth and boost investor confidence. If the government fails to bring about reforms in the coming days, analysts believe that there will be a reverse flow of foreign funds from an inflow to outflow very soon.
Further selling pressure could send the rupee re-test the 55.75/56.0 area against the dollar in the near-term. Any positive cues could lead the local currency advance above the 54.90 level after a gap of more than 5-weeks.
