21 Sep 08 NSE Currency Derivatives – FX Market Tracker
NSE had launched Currency Derivatives a few years back and it has taken off it a big manner in the recent past. It has now come out with the FX Market Tracker which would help traders trading in the rupee dollar forex market to keep themselves updated with the price and other details of the various derivative contract for the rupee dollar underlying contract. This is a welcome move from NSE and traders are likely to benefit from this move.
10 Jun 08 Rupee breaches the 43 mark against the US Dollar
In early trading in the forex market, the Indian Rupee (INR) breached the Rs. 43 to the US dollar mark. With the crude oil prices rising steadily week on week, the Indian Rupee is expected to further depriciate against the USD. For export houses which had aggressively hedged their positions in the forex derivatives market, this spells disaster as they would now make huge derivative losses. Companies which chose not to go for forex derivative hedging strategy are now passing on the benefits acrued from the depriciating rupee back to the customer. Hence companies which have not hedged have a clear competitive advatange over their competitors who have gone in for hedging.
03 Jun 08 Start Trading Forex for just $50
Today, I came across a website, RetailFX which enables you to trade in the forex market online. I was amazed at the ease with which one could get started with Forex Trading. Opening an account is simple and investors could open an account with just $50, which is approximately Rs. 2000. With RBI easing restrictions related to foreign investments, it is now legal for Indian investors to trade in the forex markets through the Forex Platform provided by various leading international forex market makers.
One big advantage that trading in the forex market provides when compared to trading in the stock markets is the flexibility available for forex traders, considering the fact that most forex markets are open 24 hours a day. Another advantage is the huge leverage available to forex traders. Infact, leverage will allow forex traders to buy or sell $ 10,000 USD with only $25 margin deposited in their forex accounts. However, traders need to understand that its is not all roses and petals out there. The risk is summarised well in this wikipedia article on Forex Scams which quotes a New York Times article
“The forex market has long been plagued by swindlers preying on the gullible. The average individual foreign-exchange-trading victim loses about $15,000, according to CFTC records.”
However, since forex trading (similar to equity trading) is a zero sum game (assuming transaction costs to be negligible), one man’s loss is another mans gain. With proper fundamental as well as technical analysis, forex trading does seem to be a profitable option for investors to generate good short term returns.
29 May 07 Rupee touches new high ahead of DLF IPO
The Indian rupee touched a new nine year high against the US Dollar, anticipating huge foreign inflows into the country due to the DLF IPO and the ICICI Bank fund raising exercise. ICICI Bank will be raising 20,000 crores while the DLF IPO will raise about 10,000 crores. Hence there would be thousands of crores worth of US Dollars coming into the country, increasing the demand for the Indian rupee. The Indian rupee ended the day at 40.40 after touching a new nine year high.
25 Apr 07 Indian Rupee breaks the 41 barrier but RBI refuses to intervene
The rupee touched a record high against the dollar, today. For the first time in a decade, the Indian rupee has crossed the Rs. 41 per dollar mark. The Indian rupee is in the middle of a very strong bull run. The appreciating rupee is causing a lot of problems for exporters and Indian software companies. However, Mr. Reddy in an interview yesterday, made it clear that the RBI has no plans to intervene in the near future. For the RBI, the rising rupee is fine but the rising inflation is not. Hence, to prevent inflation, RBI has decided not to intervene and stop the rupee from appreciating further.
24 Apr 07 Rupee at 9 year high – Best performing asian currency in year 2007
The Indian rupee touched a new nine year high on Tuesday, ahead of the RBI announcement on key rates. This surge is because investors bet on renewed capital inflows into the rapidly growing Indian economy. The Indian economy has been recieving huge foreign direct investment as well as foreign institutional investment which has led to record dollar reserves and the record rise in the value of rupee against the dollar.
This morning the Indian Rupee was trading at 41.58/59 per dollar after touching a high of 41.55 which was its highest level since May 1998. It had closed at 41.67/68 on Monday. The Indian rupee has appreciated by about 6% in the year 2007, making it the best performing Asian currency against the dollar, this year. The next best performer is the Thai baht, which has appreciated by about 3.6% against the dollar.
The surging rupee is a boon for importers and a bane for exporters. The Indian software (IT) industry in particular seems to be the worst affected.
17 Apr 07 Rupee breaches 41.75 mark – Spells trouble for IT companies
The Indian rupee has risen to 41.72, which is its strongest level against the dollar since May 1998. This will lead to a huge drop in profit margins for Indian IT companies. Markets have realised this and already the IT stocks have been beaten badly.
In anticipation of the rise in rupee, all the major Indian software companies have gone in for some protection. TCS is said to have obtained a $1 billion hedge at a price range range of 43.50 – 44. Infosys Technologies has a forex cover of $ 470 million. Currency risk can be mitigated in 2 ways. The most common way is to hedge, by selling dollars future and buying rupees through the rupee dollar futures market. The other way to mitigate risk is by buying put options. However, both these methods have their own “costs” attached with them.
09 Apr 07 Rupee touches 7 year high, but ends flat
The rupee gave up early gains to end firm on Monday(09 April), in volatile trading that saw unwinding of long dollar positions toward the close. It touched an intraday high of 42.76 per dollar which is the highest since May 1999
