Bloomberg News

Rupee Strengthens a Third Day on Global Recovery Concern Eases

October 10, 2011

Oct. 10 (Bloomberg) -- India’s rupee advanced for a third day as improved economic data from the U.S. eased concern the global recovery is faltering.

The currency rose to the highest level in more than a week and the BSE India Sensitive Index of shares climbed 2 percent. American employers added 103,000 workers in September, after a revised 57,000 in the prior month, according to a Labor Department report on Oct. 7. That exceeded the median forecast of analysts in a Bloomberg survey for an increase of 60,000.

“The positive data from the U.S. is encouraging and may be a signal of some return of stability to the global economy,” said Roy Paul, a Mumbai-based deputy general manager of treasury at Federal Bank Ltd. “That is spurring some buying of the local currency.”

The rupee strengthened 0.4 percent to 48.9775 per dollar as of the 5 p.m. close in Mumbai, according to data compiled by Bloomberg. It earlier touched 48.8950, the strongest level since Sept. 29.

Offshore forwards indicate the rupee will trade at 49.55 to the dollar in three months, compared with expectations for a rate of 49.75 on Oct. 7. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.

--Editors: Anil Varma, Simon Harvey

To contact the reporter on this story: V Ramakrishnan in Mumbai at rvenkatarama@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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