The Hindu : Business : Rupee weakens

Online edition of India's National Newspaper
Wednesday, Aug 04, 2004

Business

Business

Rupee weakens

MUMBAI, AUG. 3. A sudden resurgent dollar overseas on U.S. economic optimism amidst soaring global oil prices today weakened the rupee considerably after corporates and importers rushed to cover dollar positions in late trading and halted a brief two-session rally.

In volatile two-way trading at the interbank foreign exchange market, the rupee closed at 46.39/41 a dollar, a drop of six paise from Monday's finish of 46.34/35 and a steep fall from the early peak of 46.27/28 following a firm start at 46.31/33.

An abrupt dollar rebound in the Far-East trading on U.S. economic optimism amidst a surge in global oil prices to new 21-year peak, fuelled heavy dollar demand from corporates and importers in late afternoon trading, driving down the rupee to 46.39/41 at close, dealers said.

For most of the day's business, the rupee ruled relatively firm, supported by strong trade inflows in the face of receding demand for greenbacks, they added.

The dollar traded near its highest in five days against the euro in Tokyo, as some traders turned their attention away from concerns about terrorism to economic reports expected to show U.S. economic growth accelerating.

Global oil prices breached the $44 a dollar barrier and rose to a new 21-year peak of $44.24, before settling around $44.13 in Asian trading at the New York Mercantile Exchange.

— PTI

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