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Business News/ Opinion / Online-views/  Rupee off highs; oil companies’ dollar buys weigh
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Rupee off highs; oil companies’ dollar buys weigh

Rupee off highs; oil companies’ dollar buys weigh

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Mumbai: The rupee was up on Friday but fell from its intraday high in afternoon trades as comfort from robust inflows was largely negated by strong demand for the US unit from domestic oil companies.

At 2:21pm, the partially convertible rupee was at 44.10/11 per dollar, 0.3% stronger than the last close of 44.20/21. It had briefly risen to 43.98 in early trades.

Brent crude rose $1 to a fresh 32-month high on Friday as supply cuts in Libya offset demand worries spurred by a major earthquake aftershock in Japan.

Oil is India’s biggest import item and domestic oil firms are the largest purchasers of dollars in the local forex market.

Foreign investors have purchased nearly $3 billion of shares since the start of March, after being net sellers in January and February.

The euro’s gains against the dollar and stronger Asian peers also supported the rupee. The euro was at $1.4393 after having touched a 15-month high of $1.4405 earlier in the day.

The index of the dollar against six major currencies was down 0.51% at 75.199 points, compared with 75.649 points at the close of local trade on Thursday.

A senior foreign exchange trader at a private-sector bank said 43.97 was a resistance for the rupee. “If it breaks past this, the rupee could rise quickly to 43.70/75," he said.

The one-month onshore forward premium was at 25.50 basis points, higher from 25.00 on Thursday, the three-month was at 80.25 basis points versus 79.25 and the one-year was at 301 basis points versus 298.

The one-month offshore non-deliverable forward contracts were quoted at 44.21, 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 44.1825, with the total volume at about $2.73 billion.

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Published: 08 Apr 2011, 02:44 PM IST
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