Mumbai: The rupee strengthened past 45 to a dollar on Wednesday, supported by a strong euro and higher domestic equities, and traders said import payments could limit the rise.
“There is oil buying happening. So, we should more or less expect yesterday’s kind of movement on the rupee, wherein the strengthening bias is limited by importer demand,” a senior dealer at a cooperative bank said.
Oil is India’s biggest import item and refiners are the largest biggest of dollars in the domestic currency market. On Tuesday, the rupee had erased gains on oil and defence related payments.
At 10:28am, the partially convertible rupee stood at Rs 44.93/94, 0.3% stronger than previous close of Rs 45.06/07, and traders forecast a Rs 44.90 to 45.05 range.
The euro hit a three-week high against the dollar on Wednesday, supported by hopes for an agreement on Greece austerity steps and progress toward an aid package for the debt-laden country, bringing it near chart resistance that could limit its near-term gains.
The euro was at $1.4432 against $1.4401 at close of local forex trade on Tuesday, and the index of the dollar against six major currencies was at 74.424 points from 74.582.
The one-month onshore forward premium was at 22.25 points versus 22.50 last close. The three-month was at 70.50 points versus 66.5 and the one-year was at 256.50 points versus 249.50.
The one-month offshore non-deliverable forward contracts were quoted at 45.09, 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 45.1150. Total volume was $1.42 billion.