Indian Rupee Rises After Bernanke Comments

The Indian rupee extended gains on Thursday, July 11, 2013 to its highest level in almost a week, after Bernanke backed sustained stimulus in a speech yesterday, after minutes of the Fed's June meeting showed officials debating whether to end the central bank's $85 billion-a-month of bond purchases. The local unit was also aided by steps from the central bank to curb speculative trading in the currency and positive local shares. The currency extended its rebound from a record low of 61.2125 per dollar touched on July 8, as Indian regulators curbed speculation in rupee derivatives. The domestic currency commenced stronger by 30 paise at Rs 59.39 to a dollar and inched up to a high of 59.38 before slipping back to a low of 59.58 so far during the day. In the spot currency market, the Indian unit was last seen trading at 59.5750, higher by around 12 paise or 0.19% as compared to previous close at 59.69.

Domestic key benchmark indices extended initial gains to hit fresh intraday high in morning trade. The S&P BSE Sensex hit its highest level in nearly 5 weeks as US Federal Reserve Chairman Ben S. Bernanke's statement on Wednesday, 10 July 2013, that the world's biggest economy will continue to need stimulus. Asian shares also climbed to a three-week high on comments by Federal Reserve Chairman Ben Bernanke that highly accommodative monetary policy would be needed for the foreseeable future. At the time of writing, the S&P BSE Sensex was up 347.37 points or 1.8% to 19,641.49 while the CNX Nifty was up 108.65 points or 1.87% to 5,925.35.

The dollar slumped in thin early Asian trade early on Thursday after dovish comments from Ben Bernanke forced markets to cut bullish bets on the greenback as they reassessed when the U.S. central bank was likely to start withdrawing stimulus.

Source by Commodity Insights