Firm rebound in the US dollar in early Asian trades on Wednesday, 15 December, dragged the Indian rupee lower at opening alongside regional peers. Rupee commenced lower by around 20 paise at Rs 45.15 per dollar and was pushed further down to register an intra day low at 45.31, its lowest level since early December, on account of a weak start to the domestic equities that snapped a three day winning streak at the opening bell. The domestic currency touched the day's high at 45.15 and was last seen trading at 45.26 at 10.20 AM IST, lower by around 31 paise or 0.68% as compared to previous close at 44.95. The domestic indices edged lower in early trade, tacking weak Asian stocks. Asian shares were sluggish on Wednesday, as deteriorating sentiment among Japanese companies offset solid US retail sales figures. Trading in US index futures indicated that the Dow could fall 24 points at the opening bell on Wednesday. The key benchmark BSE Sensex is currently down around 112 points at 19686.47 while S&P CNX Nifty at the time of writing is lower by 33 points at 5911.40. Meanwhile, the Reserve Bank of India's (RBI) mid-quarter policy review to be held later during the day would be closely watched by domestic equities as well as currency for direction. At a quarterly policy review early last month, the central bank had signaled a pause in its policy tightening drive that began in October 2009. A bounce back in the greenback versus the major currencies early today drove most of the Asian currencies lower. The US dollar was up, although modestly by upbeat data on the nation's retail sales and after the Fed statement showed no signs of curtailing its economic stimulus measures that lifted bond yields and optimism about the economy. The Federal Reserve in a policy statement after its last scheduled meeting of 2010 said the economic recovery was still too slow to bring down unemployment and reaffirmed its commitment to buy $600 million in government bonds. The greenback rose from yesterday's low at close to 1.3450 levels versus the euro and advanced to be at around 1.3350 at the time of writing. As against the Japanese yen, dollar was up from 82.82 late yesterday to around 83.81 currently. The US dollar index, which tracks the greenback against a trade-weighted basket of six major currencies, is up 0.30% at 79.61. Most of the other regional peers were also lower with the Indonesian Rupiah down by 0.11% at 9021.50, the South Korean won by 1.08% at 1152.70 and the Taiwan dollar dropped around 0.06% at 29.92 against the US dollar. In the domestic bond market, early today, the yield on 10 year benchmark 7.80 GS 2020 federal paper was at 8.11% higher by 2 bps as compared to Tuesday's close at 8.09%. Yield on the federal paper 7.99 GS 2017 was at 7.99%, higher by 2 bps against previous closing at 7.97%. Meanwhile, the yield on most traded federal paper 8.13 GS 2022 was at around 8.09%, down 2 bps as compared to 8.07% registered in yesterday's close. In the domestic currency futures market on the NSE, the front month December USD/INR contract opened on Wednesday at 45.21 per dollar mark. The contract hit an intra day high at 45.41 and registered a low at around 45.21 so far during the day. Meanwhile, euro- rupee contract was at around 60.53, down by 0.31%, as against 60.72 registered in previous close. The JPY/INR contract was lower by 0.45% at 54.14 against 54.38 in the previous session. GBP/INR contract was at 71.47, down 0.13% as against 71.56 as registered at close on Tuesday. At the time of writing, the NSE December USD/INR contract was at 45.34, higher by 25 paise or 0.56% compared to the previous close at 45.08. The rupee contract on the MCX was trading close to the NSE contract and was last seen at 45.33 as against 45.08 as on Tuesday. Rupee on the contracts will likely find support at 45.27 for the day.

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