BackRupee erases gains on weak shares, importer demand
Rupee erases gains on weak shares, importer demand
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Mumbai: The rupee gave up all early gains on Friday, dragged by weak local shares, with dollar purchases by oil companies as well as a large telecom company also weighing, dealers said.
At 12:41 pm, the partially convertible rupee was at 44.89/90 per dollar, versus Thursday’s close of 44.90/91, but lower than the day’s high of 44.8275.
“(Oil) importers came into the market, dollar inflows are subdued and shares too have turned negative. But rupee may find support near 44.95," said a dealer with a state-run bank.
India imports over three-quarters of its crude oil needs and domestic oil refiners are the biggest purchasers of dollar in the local forex market.
“Movement in the euro will now be crucial to the rupee’s direction," the dealer said.
The euro was at $1.4157 in the local forex market, down from an intra-ay high of $1.4221, but lower its $1.4103 previous close. The index of the dollar against six major currencies was down 0.13% at 75.650 points from 75.841.
The euro found some reprieve on Friday after a rollercoaster ride in the past 24 hours that saw it slump to a record low on the Swiss franc before staging a small rebound on short-covering, though worries on how policymakers will tackle Greece’s debt crisis remain.
Indian shares could not hold on to early gains and turned negative on Friday, heading towards a second weekly decline, as rising local interest rates and Greece’s debt woes curbed risk-taking ability.
The one-month onshore forward premium was at 23.50 points versus 24.25 points last close. The three-month was at 74 points from 75.25 and the one-year was at 245 points versus 251.
One-month offshore non-deliverable forward contracts were quoted at 45.1, 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 on the United Stock Exchange were all at 44.9800, with total volume at $3.73 billion.
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