Risk selling extends in Asia, USDINR near record high
Indian rupee plunged to its lowest level in five-months against the US dollar on Monday as risk sentiments dampened soon after headline WPI rose much faster than expected, leaving little chance for RBI to cut interest rate. In addition, the talk of Greece exiting Euro further encouraged safety demand across the globe.
Finally, it settled at 53.96 per dollar, its weakest level last seen on 15 Dec and 0.6% softer than Friday’s close of 53.64 per dollar.
Indian rupee is likely to extend its weakness to record low against the US dollar tracking broad based gains in safe harbor currencies like US dollar and Japanese Yen after Moody’s downgraded the long-term debt and deposit ratings for 26 Italian banks, citing the country's recession and rising bad debt levels. In addition, risk aversion sentiments were at centre stage as Greece political stalemate put pressure on periphery debt yield, pushing Spanish 10-year yield to 6.31% and 5-year CDS to fresh record high at 540bps.
Indian rupee plunged to its lowest level in five-months against the US dollar on Monday as risk sentiments dampened soon after headline WPI rose much faster than expected, leaving little chance for RBI to cut interest rate. In addition, the talk of Greece exiting Euro further encouraged safety demand across the globe.
Finally, it settled at 53.96 per dollar, its weakest level last seen on 15 Dec and 0.6% softer than Friday’s close of 53.64 per dollar.
Indian rupee is likely to extend its weakness to record low against the US dollar tracking broad based gains in safe harbor currencies like US dollar and Japanese Yen after Moody’s downgraded the long-term debt and deposit ratings for 26 Italian banks, citing the country's recession and rising bad debt levels. In addition, risk aversion sentiments were at centre stage as Greece political stalemate put pressure on periphery debt yield, pushing Spanish 10-year yield to 6.31% and 5-year CDS to fresh record high at 540bps.
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