The euro fell for a fourth day and Japanese stocks dropped as investors sought less risky investments after European finance ministers failed to announce detailed plans to tackle budget deficits in the region. U.S. stocks rebounded on Feb. 5 on speculation the European Union may propose a solution for Greece’s budget deficit, the largest in the region. As sovereign risks spread in the euro-zone, risk aversion will continue. Investors are wondering how financial issues in those small nations may affect bigger ones. Commodity prices advanced amid speculation economic reports this week will bolster confidence in the global recovery and metals demand. U.S. reports on wholesale inventories, consumer confidence and the country’s trade balance are due in the next two days. Rupee opened at 46.7000/7200 against its previous closing of 46.7300/7400 and expected to trade in 46.6000/46.8500 Range today.
Indian rupee dropped today tracking a weak start to the local share market and mixed regional peers. Asian units were trading mixed compared to the dollar. The euro and growth-linked currencies were on slippery ground today as risk appetite was subdued on the back of mounting fiscal worries in the euro zone and lingering concerns about a global tax on banks. India will today publish an advance estimate of economic growth for the year ending March 31. International Monetary Fund last week said India, Asia’s third-largest economy will be among the first to recover after the global crisis. Rupee may be weak temporarily, but in the short term it looks very positive.
