Rupee falls on euro zone woes

MUMBAI Thu Nov 8, 2012 11:51pm IST

An employee uses an electronic machine to check an Indian currency note inside a bank in Allahabad December 16, 2011. REUTERS/Jitendra Prakash/Files

An employee uses an electronic machine to check an Indian currency note inside a bank in Allahabad December 16, 2011.

Credit: Reuters/Jitendra Prakash/Files

Related Topics

MUMBAI (Reuters) - The rupee fell on Thursday, snapping two sessions of gains, as euro zone concerns again took centrestage with worries over whether Spain would seek a bailout soon.

The rupee's gains from U.S. President's Barack Obama's re-election were wiped out as global stocks and the euro fell, pulling down the local currency with it.

Local shares ended down 0.3 percent, ending a six-day winning streak.

"We believe a lot of positive news has already been priced in and we reduce our bias on short USD/INR into year-end," said Vivek Rajpal, strategist at Nomura in Mumbai.

The investment bank expects the rupee to trade at 53 to the dollar by end-December and advises investors to short USD/INR through options in the near term.

The partially convertible rupee closed at 54.36/37 p er dollar, 0.3 percent weaker than its previous close of 54.2050/2150.

Investors will closely watch how the government manages its finances and whether it can push through key reforms on insurance and pensions when parliament meets later this month.

The government is hopeful of containing its fiscal deficit to 5.3 percent of GDP in this fiscal year, but a recent Reuters poll pegs it at 5.8 percent.

Sentiment on the rupee turned bearish once again after some signs of optimism in the last two months, as per a Reuters poll of currency strategists.

In the offshore non-deliverable forwards segment, the one-month contract was at 54.62 while the three-month was at 55.19.

In the currency futures market, the most-traded near-month dollar/rupee contract on the National Stock Exchange and the MCX-SX closed at around 54.55 with a total traded volume of $4.6 billion.

(Editing by Sunil Nair)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Kerry in India

REUTERS SHOWCASE

Deadly Landslide

Deadly Landslide

Landslide near Pune kills 10, scores feared trapped.  Full Article 

Fed Policy

Fed Policy

Fed presses forward with bond buying, cites uptick in inflation.  Full Article 

Big Infra Deal

Big Infra Deal

Piramal, Dutch APG tie up for $1 bln infra investment  Full Article 

E-Commerce

E-Commerce

Amazon says to invest $2 billion more in India   Full Article 

Lupin Results

Lupin Results

Q1 net profit up 56 percent on higher U.S. drug sales   Full Article 

Smuggling Gold

Smuggling Gold

Air India staff found smuggling gold  Full Article 

Economy Reboots

Economy Reboots

U.S. economy back on track with strong second-quarter rebound .  Full Article 

Auto Sector

Auto Sector

VW closes in on Toyota as global auto leader  Full Article 

Expanding Reach

Expanding Reach

Tata to invest $35 bln over 3 years, focus on new businesses   Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage