Rupee breaches 47 level to hit five-mth high of 46.98 a dlr

The Indian rupee continued its upward march for the sixth consecutive day and breached the crucial 47-level against the US currency for the first time after 19th December, 2008, on sliding dollar in the overseas markets.

The rupee also drew support from encouraging trend in the local stocks and continued optimism about faster reforms in the financial sector paving the way for increased capital inflows.



At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed stronger at 47.15/20 a dollar from its previous close of 47.37/38 a dollar and later hit a five-month high of 46.98 against the American currency.



It, however, pared gains and was quoted at 47.14/15 a dollar in late morning trade.



Forex dealers said weak dollar overseas provided a fresh impetus to the Indian currency.



The dollar fell to its recent lows against the basket of currencies on fears about the US losing the AAA rating.



They said the rupee trimmed its gains due to some dollar buying by banks, probably on behalf of oil companies.

Japan upgrades economic outlook

Japan's central bank has upgraded its economic outlook, saying the worst of the recession might be over.

The move came after the bank's two-day policy meeting, at which it opted to keep interest rates on hold at 0.1%.

While domestic demand is expected to remain low, the bank said exports, on which Japan is heavily reliant, were forecast to pick up.

Data on Thursday showed Japan's economy shrank in the first quarter at its fastest rate since records began.

Output contracted by 4% during the first three months of the year, or by 15.2% on an annual basis, as exports fell, according to official figures.

Recovering

"The pace of deterioration in the Japanese economy will likely moderate," the Bank of Japan said.

"Going forward, although domestic private demand is likely to continue to weaken, exports and production, after levelling out, are expected to start recovering and public investment to increase."

The latest outlook is more optimistic than the bank's forecast in April, when it said economic conditions had "deteriorated significantly".

While the bank did not provide new growth forecasts with numbers, it said it would expand the types of collateral on offer in order to encourage lending.

High costs fuel record loss at BA

British Airways has announced the biggest loss since the company was privatised in 1987.

BA reported a loss before tax of £401m for the year to 31 March, after seeing its results hit by a weak pound and higher fuel costs.

BA made a revised profit of £922m in the previous year.

Although revenues increased to almost £9bn, BA faced a near-£3bn fuel bill. Chief executive Willie Walsh said he saw "no signs of recovery anywhere".

Fuel costs rose 44.5% after the price of oil soared last year. The weaker pound also contributed to rising costs as fuel is bought in US dollars.

The results included redundancy-related costs of £78m.

BA said it had cut more than 2,500 jobs since last summer and added that it was in talks with unions about "pay and productivity changes".

"The prolonged nature of the global downturn makes this the harshest trading environment we have ever faced and, with no immediate improvement visible, market conditions remain challenging," Mr Walsh said.