Rupee ends marginally down on dollar demand from custodian banks

The partially convertible currency closes at 54.16/17 per dollar against its previous close of 54.1350/1450
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First Published: Wed, May 08 2013. 10 34 AM IST
The rupee failed to benefit as much given Indian shares were volatile for most of the session, leading to dollar demand from custodian banks. Photo: Priyanka Parashar/Mint
The rupee failed to benefit as much given Indian shares were volatile for most of the session, leading to dollar demand from custodian banks. Photo: Priyanka Parashar/Mint
Updated: Wed, May 08 2013. 07 27 PM IST
Mumbai: The Indian rupee remained in a tight range on Wednesday as positive sentiment due to stronger Asian currencies and the euro was offset by choppy domestic shares and demand for the greenback from custodian banks and oil importers.
Most Asian currencies gained as strong trade data from China and a record yuan boosted sentiment.
However, the rupee failed to benefit as much given Indian shares were volatile for most of the session, leading to dollar demand from custodian banks.
The rupee did not gain much even as a late spurt led the BSE index to a new three-month closing high, with mortgage lender Housing Development Finance Corp. Ltd (HDFC) hitting a record high after its earnings beat estimates.
“The rupee was closely tracking stocks and the euro today. Later we also saw some oil bids in the market,” said A. Ajith Kumar, a foreign exchange dealer with Federal Bank.
“The next key support for the dollar/rupee is at 54.05 while 54.15 will pose some resistance,” Kumar added, predicting a range of 53.90 to 54.25 for Thursday.
The partially convertible rupee closed at 54.16/17 per dollar, little changed from 54.1350/1450 on Tuesday, after moving in a thin range of 54.04 to 54.19 during the session.
Traders said volumes in the market were also slightly below normal in the absence of any large flows.
Investors are expected to shift their focus to the consumer price index and industrial production data on Friday, which will be followed by wholesale inflation data on Monday, dealers said.
The data comes as India cut short the budget session of parliament on Wednesday, two days ahead of its scheduled close and without passing major reforms like the food security and the land acquisition bills.
However, concerns about political instability could ease somewhat as India’s ruling Congress party was set for a resounding election victory in the southern state of Karnataka on Wednesday, according to early results.
In the offshore non-deliverable forwards, the one-month contract was at 54.26 while the three-month was at 54.78.
In the currency futures market, the most-traded near-month dollar/rupee contract on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 54.18 with a total traded volume of $3.4 billion. Reuters
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First Published: Wed, May 08 2013. 10 34 AM IST
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