The rupee ended weaker on Wednesday at 47.90, down from Tuesday’s 47.80, lower 10 paisa, amidst rising oil prices and a stronger dollar, reports Our Bureau in Mumbai.
However, a upswing in stocks checked losses. The dollar rose versus the euro after a report showed improved US consumer confidence numbers on Tuesday.
Dealers now await the release of the Economic Survey on July 2 and the announcement of the Union Budget on July 6 to give a direction to the currency market.
The dollar fell for the fourth-straight day against the euro, as stocks rose on investor speculation that the global recession is heading to a close, increasing demand for riskier emerging market assets. The dollar index that tracks the greenback’s movement against six majors was, however, up 0.1% by late Wednesday evening.
Oil rose above $71, following a large drop in crude inventories in the US, and output disruptions from militant attacks in Nigeria. Goldman Sachs expects the rupee to strengthen. It estimates that for the fiscal ended March 2009, current account deficit of 2.6% of GDP was lower than its expectation of 3.5% of GDP, particularly due to the rapid fall in imports in the January-March quarter.
“Strong domestic demand and its expectation of the output gap closing rapidly are likely to support a strengthening rupee. Our 3, 6, and 12-month dollar-rupee targets are at 47.3, 46.0 and 44.7, respectively,” the Wall Street bank said in a report to clients.
Government bonds ended higher amidst speculation that the Centre may not overshoot its borrowings targets for this year. The central bank on Tuesday said it would buy back debt securities next week. There is no auction of debt securities for this week.
The yield on the five-year benchmark security ended at 6.43% against 6.49% at close on Tuesday. The 10-year bond only saw trades worth Rs 335 crore. When yields fall, prices rise. The government has said that it will sell Rs 34,000 crore of bonds in July compared to the Rs 60,000 crore it sold in June.
Courtesy:- ET dt:- 02-07-09
