Weekly wrap up: Rupee returns to 40/USD mark on robust economic growth

The Indian Rupee inched up on Monday (August 27) on the expectation of capital inflow in Indian stocks on possible US Fed rate cut that would be undertaken to ease the credit condition in the global market.
The Rupee ended at 41.01/02 a Dollar, up from Friday`s close of 41.0825/0925.

The Indian unit weakened on Tuesday (August 28) on higher demand for US currency by the oil-importing companies, who came under pressure of higher crude oil prices globally. Moreover, risk-aversed investors stayed away from the local assets, on uncertainty created by the global credit crunch, caused by US sub-prime mortgage losses and on-going tussles over Indo-US nuclear deal.
The Rupee ended at 41.165/175 a Dollar, weaker than Monday`s 41.01/02.

The Indian currency received support on Wednesday (August 29) from a rise in Indian equities which raised optimism that the foreign investors will return to Indian stocks. The Rupee also drew support from the U.S. stock futures which gained on the back of investors` interest on buying stocks with low share price. The sentiments overweighed the fears of global liquidity condition triggered by sub-prime mortgage losses, and Dollar selling by Indian exporters to book the profit with the depreciating Rupee.
The Rupee closed at 41.105/115 a Dollar, slightly stronger than Tuesday`s finish of 41.165/175.

The Indian Rupee however reversed its earlier trend on Thursday, (August 30) on fears of capital outflows that would be sparked by possible slowdown in global credit markets. Additionally, Dollar demand by oil importers to pay their bills, put pressure on the unit.
The Rupee settled at 41.16/17 a Dollar, weaker than Wednesday`s close of 41.105/115.

The Rupee gained on Friday (August 31) helped by a sound Indian economic growth which would lead to capital inflows. The official data released, showed that India`s GDP grew 9.3% in first quarter of the current fiscal. Moreover, the local unit was also tracked by Asian stocks, which climbed on expectations that subprime mortgage crisis and the following credit crunch situation will normalize, as the US President George W. Bush was expected to announce measures to help subprime-mortgage borrowers.
The Rupee closed the week at 40.875/885 a Dollar, stronger by 0.7% from Thursday`s close of 41.16/17.