Rupee recoups losses, gold down
Rupee recovered intraday losses to end steady as foreign investors sold dollars on expectations of Fed cut while gold prices fell by a hefty Rs 145 to Rs 10,255 per 10 gram in the bullion market.
By Agencies |
MUMBAI: The rupee recovered intraday losses to end steady on Thursday, as foreign investors sold dollars on expectations that a cut in US rates would spur greater investment in equities and push up the local unit.
The partially convertible rupee ended at 39.485/495 per dollar -- up from the day's low of 39.56, but unchanged from the previous close.
"There was unwinding of a large options contract by a corporate, which bought dollars during the day. This was one of the key factors which pushed the rupee lower during the day," a trader with a foreign bank said.
The US Federal Reserve, which meets on Dec. 11, is widely expected to lower the key federal funds rate by 25 basis points to 4.25 per cent. It has already cut rates twice since mid-September, widening the interest rate differential with the Indian central bank's short-term lending rate of 7.75 per cent. Another Fed cut next week could push overseas investors to the higher yielding Indian market, dealers said.
Foreigners have bought a net $16.4 billion of local stocks so far in 2007. The inflows have been a key driver of the rupee this year, helping it gain about 12 per cent, to be among Asia's best-performing currencies. Traders said the central bank, which has been buying dollars this year to check the rupee's sharp rise, stayed away from trading on Thursday.
The Reserve Bank of India (RBI) bought about $52 billion in the first nine months of 2007 and is widely believed to have played an active role in the currency market in October and November.
Gold loses its shine, falls by Rs 145
Gold prices fell by a hefty Rs 145 to Rs 10,255 per 10 gram in the bullion market New Delhi today with stockists resorting to selling amidst reports of weakening global trends.
Just a day before, the rates had improved by Rs 140 per 10 gram following a boost in retail demand in view of the ongoing marriage season.
Standard gold and ornaments dropped by Rs 145 each at Rs 10,255 and Rs 10,105 per 10 gram respectively. Sovereign however remained unaltered at Rs 8,600 per piece of eight gram.
Silver ready also lost Rs 200 at Rs 18,800 per kilo and weekly-based delivery by Rs 100 at Rs 19,010 per kilo. Silver coins fell by Rs 100 to Rs 25,000 for buying and Rs 25,100 for selling of 100 pieces.
The gold prices declined in Asia on speculation that the dollar's advances against the euro will reduce the appeal of the precious metal as an alternative investment. The bullion fell 4.22 dollar to 790.92 dollar an ounce and silver declined 0.3 per cent to 14.24 dollar.
The US currency strengthened yesterday after reports showed job growth and factory orders quickened, thus reducing whatever chances of a half percentage point interest-rate cut by the Federal Reserve next week. It also diminished the attraction for dollar-denominated metal.
The partially convertible rupee ended at 39.485/495 per dollar -- up from the day's low of 39.56, but unchanged from the previous close.
"There was unwinding of a large options contract by a corporate, which bought dollars during the day. This was one of the key factors which pushed the rupee lower during the day," a trader with a foreign bank said.
The US Federal Reserve, which meets on Dec. 11, is widely expected to lower the key federal funds rate by 25 basis points to 4.25 per cent. It has already cut rates twice since mid-September, widening the interest rate differential with the Indian central bank's short-term lending rate of 7.75 per cent. Another Fed cut next week could push overseas investors to the higher yielding Indian market, dealers said.
Foreigners have bought a net $16.4 billion of local stocks so far in 2007. The inflows have been a key driver of the rupee this year, helping it gain about 12 per cent, to be among Asia's best-performing currencies. Traders said the central bank, which has been buying dollars this year to check the rupee's sharp rise, stayed away from trading on Thursday.
The Reserve Bank of India (RBI) bought about $52 billion in the first nine months of 2007 and is widely believed to have played an active role in the currency market in October and November.
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Gold loses its shine, falls by Rs 145
Gold prices fell by a hefty Rs 145 to Rs 10,255 per 10 gram in the bullion market New Delhi today with stockists resorting to selling amidst reports of weakening global trends.
Just a day before, the rates had improved by Rs 140 per 10 gram following a boost in retail demand in view of the ongoing marriage season.
Standard gold and ornaments dropped by Rs 145 each at Rs 10,255 and Rs 10,105 per 10 gram respectively. Sovereign however remained unaltered at Rs 8,600 per piece of eight gram.
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Silver ready also lost Rs 200 at Rs 18,800 per kilo and weekly-based delivery by Rs 100 at Rs 19,010 per kilo. Silver coins fell by Rs 100 to Rs 25,000 for buying and Rs 25,100 for selling of 100 pieces.
The gold prices declined in Asia on speculation that the dollar's advances against the euro will reduce the appeal of the precious metal as an alternative investment. The bullion fell 4.22 dollar to 790.92 dollar an ounce and silver declined 0.3 per cent to 14.24 dollar.
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The US currency strengthened yesterday after reports showed job growth and factory orders quickened, thus reducing whatever chances of a half percentage point interest-rate cut by the Federal Reserve next week. It also diminished the attraction for dollar-denominated metal.
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