Friday, August 2, 2013

Rupee weakens 1.07% against dollar to record low

Mumbai: Aug 02 2013(7STARNEWS)The rupee fell to a new record, past 61 to the dollar, as banks covered their positions on the US currency ahead of the release of July jobs data later Friday in that country.

The dollar was firm against the Indian currency throughout Friday mainly because it strengthened abroad following overnight data which showed that the manufacturing sector there was at its best in two years.

The Institute for Supply Management US factory activity index for July rose to 55.4 from 50.9 in June, exceeding the 52 expectation, rekindling hope that the US economy was on the growth path.

"Banks covered their dollar positions later in the day expecting strong numbers from the US. The equity markets were also negative today which pressured the rupee down," said Mohan Shenoi, treasurer, Kotak Mahindra Bank Ltd.

The rupee ended at 61.10 per dollar, down 1.07% from Thursday's close of 60.44. It had opened at 60.61 to the dollar and touched a low of 61.18, within touching distance of its all-time intra-day low of 61.21, which was reached on 8 July. The rupee's previous closing low was 60.73 per dollar on 26 June.

Since January this year, the rupee has weakened 9.98%, making it the worst-performing Asian currency after the yen.

The dollar index, which measures the US currency's strength against major currencies, was trading at 82.43, up 0.12% from the previous close.

India's benchmark Sensex ended at 19,164.02 points, down 0.79% from the previous close.

"There is no positive news from the domestic economy and since the dollar has strengthened overnight, the rupee is weak. The next big data from the US is the jobs data which will be keenly watched," said a dealer at a French bank.

The benchmark 10-year bond ended at 8.265%, up from the previous close of 8.08%. It opened at 8.143% and touched a high and a low of 8.265% and 8.106%, respectively.

The call money rate ended at 7%, down from the previous close of 7.50%. It opened at 10.02% and touched a high and a low of 10.02% and 5.75%, respectively.
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