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Rupee eases on choppy euro, local shares

Rupee eases on choppy euro, local shares
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First Published: Fri, Jul 29 2011. 03 43 PM IST
Updated: Fri, Jul 29 2011. 03 43 PM IST
Mumbai: The rupee weakened on Friday tailing a volatile euro and choppy domestic shares, with dollar demand from oil refiners also weighing.
At 11:08am, the partially convertible rupee was at Rs 44.1400/1450 per dollar, weaker than Thursday’s close Rs 44.07/08.
“The stock market is just meandering and the euro is also exhibiting wild swings, so some selling pressure in the rupee is inevitable,” said a foreign exchange dealer at a private-sector bank.
“But the direction of the euro is intact towards appreciation. So the rupee should not weaken significantly beyond 44.20 during the day.”
The was at $1.4292 after touching $1.4363, compared with $1.4289 at end of rupee trade on Thursday.
The index of the dollar against six major currencies was up 0.05% at 74.261 points, but below 74.271 when local forex market closed on Thursday.
Traders expect the rupee to rise over the near term on improved outlook for flows into local bonds and deposits after the Reserve Bank of India’s (RBI) 50 basis point rate increase on Tuesday.
Foreign fund investments in debt securities have totalled $897 million so far this month.
“The RBI’s hawkish stance is likely to increase appreciation pressure on the rupee,” Standard Chartered Bank said in a research note and raised short-term rating on rupee to overweight.
India’s benchmark share index was down 0.2% after rising 0.5%.
The one-month onshore forward premium was at 24.25 points from 24.75 on Thursday, while the three-month was at 74.25 points from 73.75 and the one-year was at 244.50 points from 243.50.
One-month offshore non-deliverable forward contracts were quoted at 44.32, 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 44.3700. The total volume stood at $3.27 billion.
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First Published: Fri, Jul 29 2011. 03 43 PM IST
More Topics: Markets | India | Rupee | Currency | Foreign Exchange |