MUMBAI: The Indian rupee ended weak on Wednesday following covering of some short-dollar positions, but gains in local equities and the euro ensured the fall was limited.
The partially convertible rupee ended at 44.5000/5100 per dollar after weakening to 44.5875, its lowest since March 31. It had closed at 44.385/395 on Monday.
The local forex market was closed on Tuesday and will be shut on Thursday for a public holiday.
"There was some corporate buying below 44.50 level, but primarily the rupee fell towards end of trade due to short-covering," said N.S.S. Mani, chief dealer at State Bank of Travancore.
"Friday, rupee could move in 44.45-44.60 band and euro, along with global equity markets, will be crucial inputs."
The euro was at $1.4514 at end of local forex trade. It had risen to as high as $1.4520 earlier in the day. The common European unit had closed at $1.4457 on Tuesday.
If the euro sustains above the $1.45 level, it could be a big positive for the rupee, dealers said.
The index of the dollar against six major currencies was down 0.12 percent at 74.761 points at end of trade in local forex market. On Tuesday, it had ended at 74.853 points.
The monthly inflation data on Friday would also be eyed as it could impact domestic equities and interest rate outlook, traders said.
"High inflation or not, rupee is likely to show a strengthening bias as dollar inflows are seen staying strong," said a dealer with a foreign bank.
Foreign funds have bought shares worth around $3.15 billion since the start of March, after being net sellers in the first two months of 2011.
India's wholesale price index probably rose 8.36 percent in March from a year earlier, slightly higher than February's 8.31 percent rise as fuel and manufacturing prices continued to climb, a Reuters poll showed on Monday.
The one-month onshore forward premium was at 25.50 basis points from 26.25 on Monday. The three-month was at 80.25 basis points versus 80.75 and the one-year was at 300.00 basis points from 304.50.
The one-month offshore non-deliverable forward contracts were quoted at 44.69, weaker than the onshore spot rate.
In the currency futures market , the most traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange ended at 44.5425, 44.5900 and 44.5875 respectively. Total volume was $8.48 billion.
Comments
Comments are closed for this article.