Mumbai: The rupee nudged higher on Friday after the stock market pulled back from a fall, but dropped for the second consecutive week as the dollar notched gains against major currencies.
The partially convertible rupee closed at 48.09/10 per dollar, 0.2% above 48.21/22 on Thursday, when it dropped as low as 48.32, its weakest since 18 May.
“Stocks went up quite significantly today while the euro also has moved up a bit. Overall, as long as euro to dollar stays above 1.39, the rupee should stay strong,” said Naveen Raghuvanshi, an associate vice-president with Development Credit Bank Ltd.
Market see-saw: The rupee has fallen about 2% in June. Ramesh Pathania / Mint
The rupee has fallen about 2% in June, but is up 8.5% from its record low of 52.2 in early March. The main stock index bounced 1.8% in choppy trade, but the rearguard rise was not sufficient to extend a run of 14 weekly gains, as investors grabbed profits after a three-month rally.
Foreigners have pumped $7.5 billion into stocks since mid-March, taking the net purchases in 2009 to $5.3 billion. Last year, they had dumped shares worth more than $13 billion, pushing the rupee down by one-fifth.
The euro and higher-yielding currencies such as the Australian dollar benefited from the brighter US economic data which revived hopes for an improvement in the global economy.
The dollar index, a gauge of the US unit’s performance versus majors, was down 0.2%. However, it is up more than 1% since early June.
One-month offshore non-deliverable forward contracts were quoting at 48.25/35, weaker than the onshore spot rate, indicating a bearish outlook in the near term.