MUMBAI: The Indian rupee nudged lower in thin trade on Friday with choppy shares providing little direction, while gains in most Asian currencies were offset by a weaker euro.
Import payments by oil refiners, the biggest buyers of dollars in the domestic market, could keep the rupee under pressure, traders said.
At 10:50 a.m. (0520 GMT), the partially convertible rupee was at 44.5100/5125 per dollar, a tad weaker than Thursday's close of 44.4950/5050.
"Euro is moving in too wide a band and global economic sentiment is also largely without direction. So dollar-rupee trade is dull and only need-based deals are being cut," said a senior foreign exchange dealer with a private sector bank.
Traders said they expected the rupee to move in a 44.45-44.55 band.
The main stock index was down 0.4 percent in choppy trade with banking shares leading the losses ahead of a possible rate increase by the central bank later this month.
The euro was at $1.4165 versus $1.4194 at the close of the domestic currency trade on Thursday.
Traders said the outcome of a tussle between the US government and the US Congress over raising of the US debt ceiling was being awaited for more cues on the global economy.
The dollar held its breath in thin Asian trades after Standard and Poor's warned there was a one-in-two chance it could cut the US credit ratings if no deal was reached on raising the government's debt ceiling.
The US Treasury has warned that it will run out of money to pay the country's bills after Aug. 2 if the $14.3 trillion borrowing limit is not raised. Failure to seal a deal by then could cause turmoil in global financial markets and plunge the United States into another recession.
The index of the dollar against six major currencies was down 0.16 percent at 75.135 points, but up from 75.019 when the rupee closed on Thursday.
The one-month onshore forward premium was at 26 points from 24 on Thursday, while the three-month was at 70 points from 70.25 and the one-year was at 229.50 points versus 231.50.
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 were all at 44.5950. The total volume was at $2 billion.
Copyright Reuters, 2011
Comments
Comments are closed.