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Rupee may hit 60 against dollar soon: Sharekhan


The rupee hit a low of 56.18 to the U.S. dollar in early trade on Wednesday- its lowest in nearly 10 months (since August 8, 2012).

Rohit Srivastava of Sharekhan said the U.S. dollar has surpassed November 2012 highs and it would not be surprising if the rupee crosses the 60 mark against the greenback.

"It's an across the board trend and most currencies are falling against the dollar," Mr Srivastava told NDTV Profit.

The dollar gained broadly in early Asian trade on Wednesday after robust economic data boosted Treasury yields and raised expectations that the Fed may make an early exit from its easing scheme, making the greenback more attractive. The dollar index measured against a basket of six key currencies was up 0.1 per cent to remain near its highest since July 2010 of 84.498 reached on May 23.

"A reduction of QE (quantitative easing or the U.S. Fed's bond buying programme) would be very negative in the short-term... With the current account deficit likely to be almost $100 billion in 2013, a reversal of capital inflows would likely wreak havoc on the rupee, as financing the current account deficit became difficult," global investment bank Nomura said in a report.

The rupee also tracked losses in domestic equity markets. The BSE Sensex and Nifty traded lower after three days of strong gains.

Dealers said month-end dollar demand from oil companies and other importers is also likely to boost the dollar.

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