Rupee at 3-month high...Up for 5th week in a row

The rupee touched a three-month high versus the US dollar, with the sentiment getting a boost from robust FII inflows and continued rally in domestic stocks. A series of positive economic data in recent times have brought global investors back into riskier assets like emerging market equities and currencies. The rupee closed at 48.6950 to the dollar after being as high as 48.67 and as low as 49.1950. It opened at 49.1250 versus the previous close of 49.16. It has gained more than 8% in 2012. On a weekly basis, the rupee hit a high of 48.67 and a low of 49.81. It had closed at 49.31 on January 27. The Indian currency gained for a fifth consecutive week, the longest winning streak since Oct. 2010 on the back of strong FII inflows and better-than-expected manufacturing PMI data for January. The rupee advanced past 49 per dollar yesterday for the first time since November, as exchange data showed that FIIs poured in US$536mn into Indian shares in the first three days of this week. On Feb. 1, HSBC Holdings Plc and Markit Economics reported that India’s Purchasing Managers’ Index (PMI) rose to 57.5 in January from 54.2 in December. The HSBC Business Activity Index for the service sector, compiled by Markit, rose to 58.0 in January from 54.2 in December. January was the third month the services index has been above the 50-mark that separates growth from contraction. The euro headed for a weekly decline as Greece and its creditors struggle to reach an agreement on a debt swap. The yen traded near a postwar high versus the dollar, raising speculation that the country will intervene to weaken the Japanese currency. The euro slid against the yen. New Zealand’s dollar fell from a five-month high. Asian currencies were headed for a fifth weekly advance, led by Taiwan’s dollar, as foreign investors pumped fresh money into the region amid optimism that the global economy is holding up well. The Bloomberg-JPMorgan Asia Dollar Index was set for its longest weekly gains since Oct. 2010 after reports showed manufacturing in the US, China and Germany picked up in January. Most Asian currencies fell today as regional stocks snapped a three-day advance.