Rupee likely to touch USD 40.25 next week

Mumbai, July 15: The rupee is likely to touch 40.25 per US dollar in the coming week, drawing support on strong investor expectations and continuous inflow of foreign investments in the market.

''Given the positive trend vivid in stock markets and the issuance of Global Depository Receipts (GDR) next week, the rupee is likely to rise up to 40.25 per dollar and may stabilise at higher margins,'' said Sudharshan Bhatt, Chief Forex Dealer of Corporation Bank.

The presence of Reserve Bank was vivid in the market in the past week as it intervened through state-run banks to buy dollars.

The rupee was hugely volatile in the last week. It opened at 40.44 per USD on Monday and settled at 40.42 per USD on Friday, gaining two paise over the week.

On Thursday, the domestic unit touched a day's high of 40.33/34, inching up to the recent nine-year peak, with massive inflows escalating the unit's prominence amongst Asian currencies.

However, central bank intervened at this point to pull the unit back to lower blocks.

Meanwhile, forward premia bettered itself throughout the week as six-month premium ended at 1.91 per cent on Friday as compared to 1.74 per cent at which it opened on Monday.

Subsequently, the annualised premia ended weak at 1.93 per cent as compared to the starting level of 1.83 per cent on monday.

According to dealers, forward premia is likley to soften in near term.

However, the week saw the rupee losing against major world currencies.

Against Euro, it closed down nearly 59 paise at 55.50 on Friday, while Pound lost nearly 65 paise at 81.85 and Japanese Yen at 32.90 posting a loss of 26 paise in the week.

The rupee was hugely volatile in the week that passed, with Reserve Bank keeping a close eye on currency's upward swing.

Spot Rupee, which gained 2 paise over the week, opened at 40.44 per dollar on monday and settled at 40.42 per dollar on Friday.

On Thursday, Rupee touched a day's high of 40.33/34, inching up to the recent nine year peak, with massive inflows escalating the units prominence amongst Asian currencies.

However, Central bank intervened at this point to pull the unit back to lower blocks.

According to dealers, the unit is likely to touch 40.25 per dollar in coming week drawing support on strong investor expectations and continuing foreign investment inflows to the market.

''Given the positive trend vivid in stock markets and the issuance of Global Depository Receipts (GDR) next week, Rupee is likely to rise up to 40.25 per dollar and may stabilise at higher margins'', opined Sudharshan Bhatt, Chief Forex Dealer, Corporation Bank.

The presence of Reserve bank was vivid in past week on Rupee as it intervened in market through state run banks to buy dollars.

Meanwhile, foward premia bettered itself throughout the week as six month premium ended at 1.91 percent on Friday as compared to 1.74 percent at which it opened on Monday.

Subsequently, Annualised premia ended week at 1.93 percent as compared to the starting level of 1.83 percent on monday.

According to dealers, Forward premia is likley to soften in near term.

However, the week saw Rupee lossing against major world currencies.

Against Euro it closed down nearly 59 paise at 55.50 on Friay, while Pound lost nearly 65 paise at 81.85 and Japanese Yen at 32.90 posting a loss of 26 paise in the week.

UNI