It had surged by huge margin of 25 paise to 45.37 per USD yesterday.

The domestic unit recorded a norrow movement with the intra day’s high and low at 45.45 and 45.39 per US Dollar.

The rupee depreciated by 7 paise against the dollar following fresh capital outflows by foreign funds amid the US currency’s gains.

Dollars gain against other currencies weighed on the Rupee sentiment, he added.

(Figures in Rupees) ——————— Currencies Buy Sell US Dollar 42.80 47.85 Sterling Pound 64.25 71.30 Euro 58.25 64.95 Australian Dollar 39.50 43.55 Bahrain Dinar 112.60 128.30 Canadian Dollar 41.15 46.30 Danish Kroner 07.60 08.85 Egyptian Pound 06.00 08.65 Hong Kong Dollar 05.35 06.35 Japanese Yen/100 47.05 52.35 Jordan Dinar 57.00 66.05 Kuwait Dinar 133.65 159.25 Malaysian Ringgit 12.25 14.90 New Zealand Dollar 29.25 33.80 Norwegian Kroner 07.10 08.20 Omani Rial 110.25 125.45 Qatar Rial 11.65 13.35 Saudi Rial 11.30 13.00 Singapore Dollar 29.75 34.85 South African Rand 05.40 06.50 Swedish Kroner 05.80 06.75 Swiss Francs 39.75 45.75 Syrian Pound 00.35 01.05 Thai Baht/100 128.00 150.90 UAE Dirham 11.55 13.10 Chinese Yuan 04.85 07.55.

The RBI data was released late on Wednesday. The rupee had been volatile in January moving both ways, and traded in a wide range of 46.62 to 45.285, which was its strongest level since September 2008. In 2009 the central bank sold a net $5.8 billion to prevent the rupee from depreciating sharply.

In early March 2009, the rupee had dropped to a record low of 52.2 per dollar but ended the year up 4.7 percent helped by large foreign fund inflows. From April to January, the first 10 months of the 2009/10 fiscal year, the central bank has been a net seller of $2.6 billion. On Wednesday at 0500 GMT, the partially convertible rupee was trading at 45.46/47 per dollar, weaker than its previous close of 45.375/385.

The Foreign exchange rates in India are updated daily from the data as published by Reserve Bank of India. It covers the currencies – US Dollars, GB Pounds, Euro & Yen.

Closing Forex Rate for the last five days:

In late New York trading on Tuesday, the 16-nation euro dropped to $1.3590 from $1.3633 late Monday.

The British pound fell to $1.4987 from $1.5072 after the U.K. said its trade deficit widened in January because of a steep drop in exports.

But the dollar slipped to 89.96 Japanese yen from 90.32 yen. The yen, along with the dollar, tends to benefit from safe-haven buying.

Greek Prime Minister George Papandreou was scheduled to meet Tuesday with President Barack Obama and the International Monetary Fund in Washington. Papandreou said that he would press the U.S. to impose stricter regulations on hedge funds and currency traders, which he believes aggravated Greece’s debt crisis.

Greece’s recent debt troubles have roiled credit markets in the 16 countries that use the euro and threatened the stability of the region’s monetary union.

Credit ratings agency Fitch Ratings said a sovereign debt default in one of the 16 nations that use the euro was still possible, said Geoffrey Yu of UBS in a research note.

Moody’s Investors Service said British banks could be downgraded as the U.K. reels in public support for them, while Fitch said the British government’s plan to reduce its deficits is “slow.”

“The overall weight of this particular problem in Europe _ the Greek problem _ is not going to go away,” said Joseph Trevisani, chief market analyst at FXSolutions.

European officials are urging Obama to join them in calling for more regulation on trading that they claim worsened debt problems in European countries, and German Chancellor Angela Merkel suggested setting up a bailout fund to help euro-using countries avoid defaults.

But those efforts may not provide much support for the euro. Policing such trading across international markets would be very difficult, Trevisani said. Meanwhile, any regional fund would take a long time to set up.

Meanwhile, job openings in the U.S. rose sharply earlier this year to 2.7 million, the highest total since February 2009, the Labor Department said Tuesday.

Markets also took notice as the Fed on Monday took another step to drain emergency liquidity from markets, also a sign that financial conditions are improving.

The central bank has been slowly withdrawing its emergency lending programs, put in place during the financial crisis to help keep credit flowing. At the same time, it has continued to say that it will leave interest rates at their current rate near zero as the economic recovery from the recession remains weak.

Higher interest rates can boost a currency as investors transfer funds to where they can earn higher returns.

“The apparatus for an eventual exit is clearly being assembled,” Yu said. “Signs that the Fed is readying itself for eventual policy normalization should remain beneficial for the dollar.”

In other late trading, the dollar edged down to 1.0262 Canadian dollars from 1.0276, but rose to 1.0759 Swiss francs from 1.0734 francs.

The rupee appreciated in each of the last four weeks and touched its strongest level since January 12 on Monday as the South Asian nation’s economic recovery spurred a stock rally and attracted foreign capital. Gains were also limited after the dollar index, used by the ICE to track the greenback against the currencies of six major US trading partners, climbed 3.7% this year.

“Greater demand for dollars is likely to emerge from importers following the rupee’s rally in recent weeks,” said RVS Sridhar, senior vice-president at Axis Bank in Mumbai. “From a technical perspective, the rupee may not have much room left to strengthen for now since the dollar has been rising against major currencies such as euro and the pound.”

The rupee weakened 0.2% to 45.6350 per dollar. The currency has gained 2% so far this year, the second-best performance among the 10 most-active Asian currencies outside of Japan.

Offshore contracts indicate bets the rupee will trade at 45.67 to the dollar in a month, compared with expectations of 45.56 on Monday. Forwards are agreements in which assets are bought and sold at current prices for future delivery. Non-deliverable contracts are settled in dollars rather than the local currency.

The performance of the BSE 100 companies has been far worse with aggregate forex losses of around Rs 43,000 crore comprising mark-to-market (MTM) loss on forex loans and outstanding forex derivative contracts which accounted for 21.4% of the reported profit before taxes, according to a recent Edelweiss Report.

However, the impact went unnoticed because of some crucial changes in accounting norms last year allowing these losses to be kept off the profit and loss statement.
During 2007, companies entered into derivatives structures to reduce their interest costs. Many companies had opted for dollar loans. The appreciation of the rupee eroded the revenues and profits of exporters as they made fewer rupees for every dollar earned abroad. On the other hand, they had to service the dollar loans, on which they incurred a higher interest outflow.

Of this number, mark-to-market (MTM) losses, which mainly relate to forex derivatives contracts, aggregated Rs 24,300 crore. The numbers were arrived at from individual disclosures by these companies in their annual reports, the Edelweiss report said. These losses could be in multiples if one considers all the listed and unlisted companies in India which had bought forex exchange derivatives from a clutch of banks during 2007 and 2008.

The main reason for such huge losses was depreciation of the rupee against dollar in 2008-09. Edelweiss now expects that the appreciating rupee will lead to paring of these MTM losses for Indian companies.

For every 10% appreciation of the rupee, aggregate MTM gains during the current financial year (FY10), for the BSE 100 companies, will be about Rs 12,200 crore, it said.

Factors such as market liquidity, investor behaviour, regulatory structure and tax laws will have a heavy bearing on the behaviour of market variables in this market.

Experts believe that increasing convertibility on the capital account would accelerate the process of integration of Indian financial markets with international markets.

The currency extended four weeks of gains and the Sensex advanced to the highest level since January 20 after Finance Minister Pranab Mukherjee said India aims to return to a 9% pace of economic expansion. Global investors bought $705 million more local shares in the three days through March 4 than they sold, exchange data shows.

“The rupee is rallying because the equity market is showing a strong positive trend and capital flows are improving,” said Roy Paul, assistant manager of treasury at Federal Bank in Mumbai. “The economic outlook is encouraging.”

The rupee strengthened 0.2% to 45.53 per dollar. It touched 45.38 earlier, the highest level since January 11. The rupee has gained 2.2% so far this year, the third-best performer among the 10 most-active Asian currencies outside of Japan.

Offshore contracts indicate bets the rupee will trade at 45.57 to the dollar in a month, compared with expectations of 45.65 at the end of last week. Forwards are agreements in which assets are bought and sold at current prices for future delivery. Non-deliverable contracts are settled in dollars rather than the local currency.

India’s economy may expand 8.2% in the 12 months from April 1, from an estimated 7.2% this year, the finance ministry forecast on February 25. Gross domestic product growth averaged 9.5% per annum between 2006 and 2008.

The partially-convertible rupee weakened today on the back of weaker regional peers and taking cues from the domestic stock markets, they added.

The local unit was moving in a narrow range between 45.59 and 45.53 per USD in the intra day.

With the important US non-farm payrolls data out of the way, which has come robust despite weather problems in February, we expect the rupee’s gradual pace of appreciation to continue over this week.

Assuming no fresh bout of risk-aversion news from the global markets, we expect spot rates to test the low seen in early January.

This week, the move will be supported by the likely participation of international investors in the large NMDC IPO. No specific large movements are expected in any of the major currencies this week as global data release is light with only likely market-moving data being the US advance retail sales and University of Michigan Confidence index, due on Friday.