India Forex - Rupee depreciates from 2-month high to 45.64/$ on Wednesday 10 March 2010
Written by admin on March 10th, 2010 in India Forex.
India Wednesday 10 March 2010 - The rupee depreciated, after six days of gains, on speculation that importers will purchase dollars to pay for shipments, taking advantage of the local currency’s advance to a two-month high this week.
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.