Positive start to the domestic equities and the US dollar paring some of its earlier gains aided the Indian rupee to commence relatively higher on Friday after opening sharply lower in the previous session. Rupee opened stronger by around 12 paise on the last trading day of the week at Rs. 46.66 per dollar. The domestic currency has remained relatively steady so far during the day in line with the local share market and a range bound movement in the greenback overseas.
The key benchmark indices remained firm in morning trade as Asian stocks rose on bargain hunting after last three days' losses. US stocks ended down for a third straight day on Thursday, 12 August 2010, as an unexpected rise in jobless claims and a sobering revenue outlook from Cisco underscored the hurdles to economic recovery. The BSE 30-share Sensex was up 81.67 points or 0.45%, off close to 20 points from the day's high and up close to 105 points from the days low.
The US dollar extended its earlier gains and rose against major currencies overnight after an unexpected rise in US weekly jobless claims and weaker-than-expected euro zone data spurred safe-haven demand. Americans filing new claims for unemployment insurance unexpectedly rose in the latest week to its highest in nearly six months, the latest sign of a flagging US economic recovery. Moreover, figures showed Greece's economy shrank more than expected in the second quarter, while euro zone industrial production unexpectedly declined in June added to the recovery concerns sending the euro slide to a three-week low at around 1.27 against the dollar yesterday.
However, the US dollar was relatively range bound in today's trade paring some of its former gains, failing to give a definite direction for the domestic unit. The Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was down almost 0.19% at 82.48.
Spot rupee commenced relatively higher on Friday at 46.66 as compared to a lower opening in the previous session. The partially convertible currency registered an intra day low at 46.67 and hit an intra day high at 46.56 so far during the day, as per data from CCIL. Rupee was last seen trading at 46.64 at 11.30 AM IST, down around 14 paise or 0.30% as compared to the previous closing price at 46.78.
In the domestic currency futures market on the NSE, the front month August contract opened on Friday at 46.85 per dollar mark, hitting an intra day high at 46.85 and registering a low at around 46.66 so far during the day. Rupee was last seen trading at 46.71, down around 19 paise or 0.41% as compared to the previous close at 46.90. The contract will likely find an intra day support at 46.62.
In the domestic bond market, the yield on 10-year benchmark federal paper, 7.80% GS 2020, increased 4 bps to 7.87% at 11.20 AM IST, compared to 7.83% at close in the previous trading session. The bond yields increased as investors trimmed positions ahead of auction of dated securities worth Rs 12000 crore scheduled for today. The increase in US treasury yields and tight liquidity also impacted the sentiments. Meanwhile, the investors were also cautious ahead of key economic data on inflation due to be released on Monday.
Meanwhile, in commodities, light sweet crude oil for September delivery was up 94 cents to US$ 76.68 on the GLOBEX division of New York mercantile exchange. Oil fell to a two-week low near US$76 a barrel overnight, marking a third straight session of sharp losses, as fickle fuel demand continued to sour investor risk appetite.