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Rupee recovers early losses; shares, dollar selling aid

Rupee recovers early losses; shares, dollar selling aid
PTI
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First Published: Fri, May 06 2011. 11 58 AM IST
Updated: Fri, May 06 2011. 11 58 AM IST
Mumbai: The rupee pulled back from its near six-week low on Friday morning and was largely stable as exporters stepped up dollar selling, with positive local shares helping, but it remained under pressure due to a strong US unit.
At 11:15am, the partially convertible rupee was at Rs 44.7550/7600 per dollar, after touching Rs 44.90 in early trades - a level last seen on 28 March. It had closed at 44.76/77 per dollar on Thursday.
Traders said the Indian unit was not likely to weaken beyond 44.90 per dollar, which is seen as a strong support level.
“It looks unlikely because exporters are very profitable at that level (44.90 per dollar). There is a lot of (dollar) selling at that level,” the chief dealer at a state-run bank said.
“But the rupee may again touch 44.90 during the day,” he said, adding the rupee will weaken if Indian shares turned negative.
Indian shares rebounded 1.2% on Friday, with financials leading the rise, after nine sessions of decline, with investors encouraged by a steep fall in oil prices in the previous session.
The dollar on Friday held on to most of its chunky gains made the previous day and key resistance levels were in its grasp as tumbling commodity prices and a series of soft US data prompted profit-taking in higher-yielding currencies.
Traders said importers’ demand for the greenback also weighed on the rupee. Oil importers are the top buyers of dollars in the domestic market.
The one-month onshore forward premium was at 25.25 points versus 25.50 points at its previous close. The three-month was at 77 points from 78 points and the one-year was at 299.50 points compared with 305 points.
The one-month offshore non-deliverable forward contracts were quoted at 45.04, 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 44.9700, 44.9650, 44.9675, respectively, with total volume at $1.78 billion.
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First Published: Fri, May 06 2011. 11 58 AM IST
More Topics: India | Markets | Rupee | Currency | Foreign Exchange |