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Rupee snaps 2-session losing streak; dollar demand weighs

Rupee snaps 2-session losing streak; dollar demand weighs
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First Published: Mon, May 09 2011. 12 03 PM IST
Updated: Mon, May 09 2011. 12 03 PM IST
Mumbai: The rupee rose on Monday snapping a two-session losing streak helped by the dollar’s weakness overseas and on hopes of robust dollar inflows towards state-run power firm share sale.
But dollar buying by domestic oil firms tempered the local unit’s gains, traders said.
At 11:03 am, the partially convertible rupee was at 44.6725/6750 per dollar, compared with 44.785/795 previous close, when it had touched 44.90 -- a level last seen on 28 March.
Intraday, the rupee is expected to trade in 44.58-44.70 band, traders said.
“The factors to watch are the dollar’s performance across the global markets and the inflows on account of the PFC (Power Finance Corporation) offering,” said a foreign exchange dealer at a foreign bank.
The state-run PFC aims to raise up to $1 billion through the offer.
The index of the dollar against six major currencies was down 0.33% at 74.591 points while the euro was at $1.4391.
The euro had been at $1.4515 and the dollar index at 74.149 points when the local forex market closed last Friday.
The euro bounced back in early Asian trade after a steep drop last week, but speculators’ bloated long positions in the currency pointed to the risk of further falls.
“The rupee was on track to improve (strengthen) even more, but then some oil-related buying emerged,” said a dealer with a state-owned bank.
Oil is India’s biggest import item and domestic oil firms are the biggest purchasers of dollars in the local forex market.
Brent crude rose above $110 a barrel on Monday on a weaker dollar and concerns over global oil supplies, after losing $16 last week in its biggest ever decline in dollar terms.
The one-month onshore forward premium was at 28.00 points versus 25.75 points at previous close. The three-month was at 79.25 points versus 78.00 points and the one-year was at 303.25 compared with 299.00 points.
The one-month offshore non-deliverable forward contracts were quoted at 44.91, 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 44.8375, with total volume at $1.87 billion.
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First Published: Mon, May 09 2011. 12 03 PM IST
More Topics: Markets | Rupee | Currency | Asia | BSE |