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Business News/ Money / Personal-finance/  Rupee hits 2-week high ahead of key US. data
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Rupee hits 2-week high ahead of key US. data

Rupee hits 2-week high ahead of key US. data

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Mumbai: The rupee strengthened to its highest level in nearly two weeks on Friday boosted by some dollar sales by exporters and weakness in the US unit ahead of the key non-farm payrolls data due at 1230 GMT.

The partially convertible rupee closed at 46.63/64 per dollar, after rising to 46.6250 during trade, its highest since 23 August and 0.2% stronger than Thursday’s close of 46.7150/7250. The unit moved in a band of 46.6250 - 46.7150.

“There have been some exporter flows over the last two days. The market is now awaiting the NFP data and any bad news may trigger risk aversion, which will be bad for the rupee," said Vikas Chittiprolu, a senior forex trader at state-run Andhra Bank.

“Overall I see a range of 46.40-46.90 for next week with eyes on the equity markets," he added.

On Friday, Indian shares logged their fourth weekly gain in five weeks, but edged down 0.1% as investors were nervous ahead of key jobs data.

Traders watch shares moves for cues on the direction of capital flows. So far this year, foreign funds have bought shares worth $13 billion in addition to last year’s record $17.5 billion investment.

The trade deficit swelled in July to its biggest level in almost two years, putting further pressure on the current account and on the need for India to attract capital inflows to avoid pressure on its currency.

There was no concern as of now on the amount of capital inflows coming into the country, Reserve Bank of India deputy governor K.C. Chakrabarty said on Friday.

“The rupee was largely rangebound today. Markets were just too dull ahead of the NFP. I still see some strength in the rupee going ahead, but if the NFP data is bad then it may have to wait," said Naveen Raghuvanshi, an associate vice president with Development Credit Bank in Mumbai.

“I expect a lot of sellers to come in if the rupee breaches the 47 mark, where as there is strong support for the dollar around 46.55 levels, hence that should be the range at least for next week," he added.

The dollar struggled on Friday while the euro crept up before US employment data which is expected to show more job losses and may fuel dollar selling but also heighten risk aversion.

Economists expect a decline of 100,000 jobs overall, and a rise of 41,000 private-sector jobs in August.

The index of the dollar against six major currencies was down 0.1% and most Asian currencies too were stronger against the dollar.

One-month offshore non-deliverable forward contracts were quoted at 46.85, weaker than the onshore spot rate, suggesting a bearish near-term outlook.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX closed at 46.7850 and 46.78 respectively, with the total volume on the two exchanges at a low $3.45 billion.

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Published: 03 Sep 2010, 07:23 PM IST
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