The dollar headed for a weekly loss against the euro and the yen before a U.S. report forecast to show American employers cut jobs last month, damping demand for assets in the world’s largest economy. The euro traded near a two-week high versus the dollar before a European report today that economists said will show retail sales in the region rose for a third month. The yen fell against higher-yielding currencies after Ichiro Ozawa, who is challenging Japan’s Prime Minister Naoto Kan in this month’s race to head the ruling Democratic Party, said intervention in currency markets to stem the yen’s gains is a possibility. The euro zone economy has surprised to the upside, led by a robust recovery in Germany. As this higher growth path is priced into the markets, the euro will likely gain. Rupee opened at 46.6500/46.6700 against its previous closing of 47.71/7200 and expected to trade in 46.6000/46.8000 Range today
The Indian rupee pulled back from a firm start and steadied today as shares trimmed gains amd traders watched the dollar\'s movement overseas. The rise in shares was already factored in; any stronger movement may take the rupee also higher India\'s widening trade gap may eclipse forex market sentiment in the near term, but prospects of capital inflows and strong economic growth may keep the outlook for the rupee bright in the medium to long term, the trade deficit swelled in July to its biggest level in almost two years, putting further pressure on the current account and on the need for India to attract capital inflows to avoid pressure on its currency. The dollar was on the defensive, retaining most of the losses sustained the previous day when upbeat data helped lure investors away from safe-haven currencies and assets
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