Rupee futures weaken in pre-Asia trade

NEW YORK Tue Aug 20, 2013 3:27am IST

A grocery shop owner counts rupees notes in Ahmedabad May 23, 2012. REUTERS/Amit Dave/Files

A grocery shop owner counts rupees notes in Ahmedabad May 23, 2012.

Credit: Reuters/Amit Dave/Files

Related Topics

NEW YORK (Reuters) - The partially convertible rupee weakened in the futures market late in New York trade on Monday, signaling the currency is likely to find more sellers once Asian trade opens for business on Tuesday.

Rupee is down more than 13 percent in spot trading against the U.S. dollar so far this year, with the majority of the decline coming after the U.S. Federal Reserve hinted in May that it would begin slowing its pace of quantitative easing.

In late New York trade, one-month dollar rupee non-deliverable forwards gapped to a record high 64.50, albeit on thin volume. Trading in these forward contracts closed in Europe at 63.50.

The bid on the rupee was last at 63.12 per U.S. dollar according to Thomson Reuters data, a record low for Asia's third-largest economy.

The Reserve Bank of India has proven unable to stem the rupee's selloff, despite intervention and curbs on outflows from companies and individuals, which have dented India's stock and bond markets.

Shares of India-focused exchange traded funds were sharply lower in New York stock market trading.

Investor anticipation of the Fed's move to slow its purchases of bonds has resulted in higher yields on government bonds, raising the attractiveness of the dollar and dollar-denominated assets.

It also highlights India's struggle, as well as those of other emerging market nations, to narrow their current account deficits. These deficits make their currencies more vulnerable to sudden capital flight when cheap money supplied by central banks slows.

India's current account deficit hit a record high 4.8 percent of gross domestic product, while its economic growth has slowed to a decade low of 5 percent.

Indonesia's rupiah has also come under severe selling pressure, falling to a four-year low of 10,490 per dollar on Monday after the Bank of Indonesia reported its current account deficit widened to 4.4 percent of GDP in the second quarter.

Its one-month NDF reached 10,920 in thin New York trade against the greenback, its weakest point since April 2009.

(Reporting by Daniel Bases; Editing by Dan Grebler)

FILED UNDER:

Reuters Showcase

GDP Growth

GDP Growth

India revises up 2013/14 GDP growth to 6.9 percent.  Full Article 

Pharma Deal

Pharma Deal

Sun Pharmaceutical wins U.S. approval to buy Ranbaxy  Full Article 

Adani Restructuring

Adani Restructuring

Adani hives off power, ports businesses to boost growth.  Full Article 

Bank of Baroda

Bank of Baroda

Q3 net profit down 69 pct on higher provisions  Full Article 

Trading Fees

Trading Fees

BSE slashes fees in FX derivatives battle with NSE  Full Article 

SpiceJet Turnaround

SpiceJet Turnaround

SpiceJet board approves up to $243 mln share sale plan  Full Article 

Currency Market

Currency Market

RBI urges companies to hedge FX exposure  Full Article 

Banking Sector

Banking Sector

Banks say no room to cut lending rates, thwarting RBI easing  Full Article 

Reuters Poll

Reuters Poll

RBI seen holding rates steady on Tuesday, minority of analysts expect cut  Full Article 

Reuters India Mobile

Reuters India Mobile

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