Thursday, January 20, 2011

Currency market update

The Indian rupee opened the day’s trade a bit higher against the US dollar, however, the momentum from the previous session’s gains faded away as the stock markets were pulled down. The lingering strength in the European currency against the US dollar following the European Financial Ministers meeting on Tuesday had put pressure on the US dollar against the rupee. In the spot currency market, the Indian unit ended at 45.46, lower by around 2 paise or 0.04% as compared to previous close at 45.44.

The European currency climbed over to towards an eight week high on Wednesday against the US dollar as the momentum after the Financial Ministers meeting and the better than expected economic numbers from the European Union kept the sentiments positive. However risks for the single currency remain as debt costs of the peripheral countries remain high. The Fitch rating agency had downgraded the rating of Greece to BB+ on 14th of January 2011.

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