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Rupee ends off 3-week high on euro retreat

Rupee ends off 3-week high on euro retreat
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First Published: Mon, Oct 17 2011. 06 03 PM IST

Updated: Mon, Oct 17 2011. 06 03 PM IST
Mumbai: The rupee ended off its near three-week high on Monday after a rally in the euro lost steam, and as dollar demand from domestic oil refiners and weak equities weighed.
However, dollar sales by domestic corporate firms cushioned the local unit from a sharp slide, traders said.
The partially convertible rupee ended at 48.945/955 per dollar, 0.1% stronger than Friday’s 49.0175/0275 close. Intraday, it touched 48.6850 -- a level not seen since 28 September.
“The downward spiral in euro accompanied by negative comments on debt crisis resolution pulled rupee back. But there was a good amount of dollar selling by corporates that saved the day,” said Ashtosh Raina, head of foreign exchange trading at HDFC Bank.
The euro came off highs after German finance minister Wolfgang Schaeuble said a forthcoming European Union summit would not yield a definitive solution to the region’s debt crisis.
Earlier in the day, the euro had hit a one-month high against after a Group of 20 summit left hopes intact the EU would decisively address the region’s debt crisis this week.
The single currency was $1.3786 at end of rupee trade, after touching an intraday high of $1.3914. The unit had been $1.3784 on Friday.
The index of the dollar against six major currencies was at 76.998 points, higher than 76.992 previously.
Main share index closed 0.34% lower, dragged by energy major Reliance Industries and profit booking by traders after the market ended at its highest closing level in four weeks in the previous session.
Some traders still expect the rupee to fare better in coming days on hopes that a road map to the resolution of the euro zone debt crisis will soon be thrashed out and that the United States’ economy will gain momentum.
The rupee could therefore touch 48.25 levels in two weeks time, they said.
Data last Friday showed US retail sales in September grew at the fastest pace in seven months as consumers shook off concerns about a weak stock market and political gridlock.
The one-month onshore forward premium on the rupee was at 24 points from 22.25 on Friday, the three-month premium was at 60.75 points from 60 and the one-year premium was 135.75 points, from 138.
The one-month offshore non-deliverable forward contracts were quoted at 49.18, weaker than the spot rupee 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 ended at 49.0500, 49.0475 and 49.0525 respectively. The total traded volume on the three exchanges was $5.59 billion.
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First Published: Mon, Oct 17 2011. 06 03 PM IST
More Topics: Markets | India | Rupee | Currency | Dollar |