The Indian rupee edged lower at commencement on Friday, July 12, 2013, snapping a three day rally against the US dollar on account of a rebound in the greenback overseas. The domestic currency opened lower by around 11 paise at Rs 59.79 to a dollar and climbed to a high of 59.74 before slipping back to a low of 59.8950 so far during the day. In the spot currency market, the Indian unit was last seen trading at 59.8925, weaker by 21 paise or 0.34% as compared to previous close at 59.69.
Rupee edged lower on Thursday as importers including oil firms bought dollars, while the initially big impact from Federal Reserve Chairman Ben Bernanke's comments on U.S. stimulus faded later in the session. Bernanke said the Fed would continue to pursue an accommodative monetary policy as inflation remained low and the unemployment rate might be understating the weakness of the labour market.
Meanwhile, domestic investors are awaiting industrial output and consumer price inflation data due after market hours on Friday for near-term direction. Industrial production is seen rising a tepid 1.5% in May 2013, as per the median estimate of a poll of economists carried out by Capital Market. Industrial production had risen 2.3% in April 2013. Inflation based on the combined consumer price index (CPI) of urban and rural India is projected at 9.3% in June 2013, same as in May 2013, as per the median estimate of a poll of economists carried out by Capital Market. CPI inflation had eased to 9.31% in May 2013 from 9.39% in April 2013.
Domestic key benchmark indices further pared gains to hit fresh intraday low in morning trade. Most Asian stocks fell on Friday, 12 July 2013, as investors turned cautious ahead of Chinese data, including second-quarter growth and June industrial production which is scheduled for release next week. Foreign institutional investors (FIIs) bought Indian shares worth a net Rs 638.26 crore on Thursday, 11 July 2013, as per provisional data from the stock exchanges. At the time of writing, the S&P BSE Sensex was up 124.92 points or 0.63% to 19,800.98 while the CNX Nifty was up 17.10 points or 0.29% to 5,952.20.
The U.S. dollar was quietly nursing its losses on Friday as the smoke cleared after a couple of sessions of wild action that left markets hoping for a bit of calm and consolidation.
Source by Commodity Insights
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