Indian Rupee: Cautious Start To Week
Dollar reversed some of its early decline against the euro is likely to weigh on the Indian rupee at the start of the new week as investors trade cautiously ahead of this week's expected statement from the US Federal Reserve. Rupee ended weaker at 62.96 per dollar on Friday, as against its previous close of 62.50.
Dollar reversed some of its early decline against the euro is likely to weigh on the Indian rupee at the start of the new week as investors trade cautiously ahead of this week's expected statement from the US Federal Reserve. Rupee ended weaker at 62.96 per dollar on Friday, as against its previous close of 62.50.
Broad based decline was witnessed on the bourses on Friday after the latest data showed acceleration in consumer price inflation last month. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their lowest closing level in more than four weeks. The Sensex lost 427.11 points or 1.48% to settle at 28,503.30.
India's exports contracted last month by over 15% to US$ 21.54 billion, while imports also fell by as much leaving a lower trade deficit of US$ 6.84 billion. With imports slowing down, mainly on account of lower crude oil prices, the trade deficit declined to US$ 6.84 billion. The deficit, which reflects higher imports than exports, was US$ 8.32 billion in January. The merchandise exports were US$ 25.35 billion in February 2014. Imports during February were valued at US$ 28.39 billion, while it was US$33.66 billion in the year-ago month, down 15.60%.
On the global front, consumer sentiment in the US unexpectedly deteriorated in the month of March, according to the preliminary results of a survey by the University of Michigan. The report showed that the consumer sentiment index tumbled to 91.2 in March from the final February reading of 95.4. The drop in consumer optimism was seen among lower and middle income households, while confidence improved among households with incomes in the top third. Russia's central bank reduced interest rates for the second time this year and signaled more easing in coming time.
Crude oil slumped nearly five per cent on significant demand worries. A monthly report from the International Energy Agency raised concerns about the global crude oil glut. Massive strength in the US dollar also hurt sentiments. Gold edged up marginally on support around four month lows.
In the global currency market, the euro sank to a fresh 12-year low early on Monday after a recent bounce was met with fresh selling interest in a sign that investors were still very bearish on the common currency.
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