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Rupee snaps 2-day fall on share gains, dollar inflows

Rupee snaps 2-day fall on share gains, dollar inflows
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First Published: Fri, Feb 11 2011. 05 45 PM IST
Updated: Fri, Feb 11 2011. 05 45 PM IST
Mumbai: The rupee recovered from a near two-week low on Friday tracking sharp gains in domestic shares in late trade and boosted by some dollar inflows from a large pharmaceutical company.
The partially convertible rupee closed at Rs 45.68/69 per dollar, slightly stronger than Thursday’s close of Rs 45.725/735. The rupee traded in a band of Rs 45.6450 to Rs 45.7825 during the day. On the week, the rupee shed 0.2%.
“Alternate bids and offers were seen in the market today, but the biddish movement continued throughout the day. I suspect some government-related buying was there,” said Vikas Chittiprolu, a senior foreign exchange dealer with Andhra Bank.
“Some corporates sold dollars at highs. I think the biddish momentum should continue next week as well. The rupee can possibly touch 46 next week,” he added.
Traders said a large pharmaceutical likely sold dollars in the market at around 45.75 levels, helping the rupee recover from its lows.
Shares snapped a three-day losing streak and gained 1.5% on Friday, helped by gains in financials and a late recovery in Anil Ambani shares.
Foreign funds, however, are still net sellers of $1.7 billion so far this year, after buying a record $29.3 billion last year.
Traders said the euro’s losses in late trade failed to weigh on the rupee due to the inflows seen from some corporates, but next week the rupee could weaken again.
The euro fell on Friday following a new bout of market jitters over the euro zone’s sovereign debt problems, while the dollar struck a one-month high against the yen after data underscored recovery in the US jobs market.
The dollar index, a measure of the greenback’s performance against six major currencies, was up 0.4 percent at 78.597 points when the rupee market closed.
One-month offshore non-deliverable forwards contracts were at 45.97, weaker than the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, MCX-SX and the United Stock Exchange closed at 45.7875, 45.7850 and 45.7925 respectively with the total traded volume at $6.2 billion.
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First Published: Fri, Feb 11 2011. 05 45 PM IST
More Topics: Rupee | Currency | Foreign Exchange | Dollar | Markets |