MUMBAI: The Indian rupee fell on Wednesday on the back of dollar demand from oil importers and negative local shares that raised worries of foreign fund outflows, while traders awaited the September quarter growth data due around 0530 GMT.
At 10:25 a.m. (0455 GMT), the partially convertible rupee was at 52.1550/1600 per dollar, 0.3 percent weaker from Tuesday's close, after trading in a 52.0300-52.1975 band.
"Traders will be watching the GDP data, and if the numbers are lower than expected, say around 6.5 percent, the rupee should fall further," said Hari Chandramgathan, a foreign exchange dealer with Federal Bank.
"Initial support for rupee lies at 52.20 and then at 52.38," he said.
Asia's third largest economy probably grew an annual 6.9 percent in the quarter through September, at its weakest pace in more than two years, the median forecast from a poll of 22 economists showed.
Shares fell 0.7 percent in early trade on Wednesday, led by banking stocks, as nervous investors awaited the economic growth data.
Oil is India's biggest import item and oil refiners, the largest buyers of dollars in the local market, step up purchase at month-end to meet payment obligations.
Oil prices rose on Tuesday on a report of improved US consumer confidence, an Italian bond auction attracting demand and after an attack by Iranian protesters on two British embassy compounds in Tehran.
Traders said movement in the euro will also be watched for further direction.
The euro was trading at $1.3321, compared with $1.3414 at the end of local trade on Tuesday, while the index of the dollar against six major currencies was at 79.013 points versus 78.624 previously.
The common European currency barely budged in Asia on Wednesday as the market gave a guarded reception to details on the euro zone's new lending facility and on proposals to expand funding for the IMF so it could lend to troubled members such as Italy.
The one-month offshore non-deliverable forward contracts were quoted at 52.52.
The one-month onshore forward dollar premium was at 28.50 points from 29.75 on Tuesday, the three-month was at 63 points from 64, and the one-year premium was at 160 points, from 165.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange were at 52.4075, while those on the United Stock Exchange and the MCX-SX were both at 52.4100. Total volume was at $633 million.
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