Indian rupee hits 3-1/2 month peak

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Updated 01 February 2013
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Indian rupee hits 3-1/2 month peak

MUMBAI: The Indian rupee strengthened slightly against the dollar after earlier hitting a three-and-a-half month high, while posting its first monthly gain in four on the back of heavy dollar inflows into the domestic equity and debt markets.
Foreign funds bought shares and bonds of more than $ 4 billion until the second-last day of the month, helping the rupee gain 3.3 percent, and easing concerns about India’s current account deficit.
The strong inflows have come in a month in which the government announced additional fiscal and economic reforms, including allowing diesel prices to rise further and imposing duties on gold imports, shoring up confidence in the economy.
The central bank this week also delivered its first interest-rate cut in nine months, sparking more optimism about economic growth, although it was cautious on future monetary easing.
“I think there is a lot of scope for a further rally in the rupee, 53.35 was a crucial support and now the next support is closer to 53,” said Naveen Raghuvanshi, associate vice-president with Development Credit Bank.
“Over the next fortnight, the rupee may touch 53 if not break it, as there will be lot of dollar demand emerging around that mark. Broadly, the rupee should hold in a 53.10 to 53.40 range tomorrow.”
The partially convertible rupee closed at 53.2150/2250 per dollar versus its previous close of 53.30/31. It earlier hit 53.07, its strongest since Oct. 18. The rupee posted its first monthly gain in four and is the best-performing currency in Asia so far in 2013.

Traders, however, said there was strong resistance seen due to residual month-end dollar demand from importers, while oil firms were also seen buying aggressively as current levels are attractive.
Domestic shares fell, led by ICICI Bank, which was hit by profit-taking after beating forecasts with its quarterly earnings.
Investors are now focusing on the budget for the next fiscal year to be unveiled in late February. Finance Minister P. Chidambaram has promised to stick to the government’s fiscal deficit targets.
The Indian government will shed 10 percent in Oil India through an auction on Friday, ahead of a stake sale in NTPC on Feb. 7.
“The fireworks are likely to start tomorrow with respect to dollar inflows,” Development Credit Bank’s Raghuvanshi said.
India’s fiscal deficit during the April-December period was 4.07 trillion rupees ($ 76.22 billion), or 78.8 percent of the budgeted full fiscal year 2012/13 target, government data showed.
The possibility of India losing its investment grade credit rating has receded somewhat as a result of economic reforms by the government since last September, an analyst with rating agency Standard & Poor’s told Reuters.
In the non-deliverable forward, the one-month contract was at 53.44, while the three-month was at 54.01.
In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 53.4050 with total traded volume of $5.5 billion.


EU to respond to any US auto tariff move: report

Updated 23 June 2018
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EU to respond to any US auto tariff move: report

  • Trump threatened to impose 20 percent tariff
  • Shares in carmakers slip on trade war fears

PARIS: The European Union will respond to any US move to raise tariffs on cars made in the bloc, a senior European Commission official said, the latest comments in an escalating trade row.
US President Donald Trump on Friday threatened to impose a 20 percent tariff on all imports of EU-assembled cars, a month after his administration launched an investigation into whether auto imports posed a national security threat.
“If they decide to raise their import tariffs, we’ll have no choice, again, but to react,” EU Commission Vice President Jyrki Katainen told French newspaper Le Monde.
“We don’t want to fight (over trade) in public via Twitter. We should end the escalation,” he said in the comments published on Saturday.
The European Autos Stocks Index fell on Friday after Trump’s tariff threat. Shares US carmakers Ford Motor Co. and General Motors Co. also dropped.
“If these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the US Build them here!” Trump tweeted.
The US Commerce Department has a deadline of February 2019 to investigate whether imports of automobiles and auto parts pose a risk to US national security.
US Commerce Secretary Wilbur Ross said on Thursday the department aimed to wrap up the probe by late July or August. The Commerce Department plans to hold two days of public comments in July on its investigation of auto imports.
Trump has repeatedly singled out German auto imports to the United States for criticism.
Trump told carmakers at a meeting in the White House on May 11 that he was planning to impose tariffs of 20 or 25 percent on some imported vehicles and sharply criticized Germany’s automotive trade surplus with the United States.
The United States currently imposes a 2.5 percent tariff on imported passenger cars from the EU and a 25 percent tariff on imported pickup trucks. The EU imposes a 10 percent tariff on imported US cars.
The tariff proposal has drawn sharp condemnation from Republican lawmakers and business groups. A group representing major US and foreign automakers has said it is “confident that vehicle imports do not pose a national security risk.”
The US Chamber of Commerce said US auto production had doubled over the past decade, and said tariffs “would deal a staggering blow to the very industry it purports to protect and would threaten to ignite a global trade war.”
German automakers Volkswagen AG, Daimler AG and BMW AG build vehicles at plants in the United States. BMW is one of South Carolina’s largest employers, with more than 9,000 workers in the state.
The United States in 2017 accounted for about 15 percent of worldwide Mercedes-Benz and BMW brand sales. It accounts for 5 percent of Volkswagen’s VW brand sales and 12 percent of its Audi brand sales.