Mumbai: The rupee crawled higher on Friday taking cues from the euro’s gains against the dollar, but weaker local shares and high oil prices kept a lid on the rise.
At 11:06am, the partially convertible rupee was at Rs 45.1175/45.1200 per dollar, 0.1% stronger than its previous close of Rs 45.18/19.
The euro was at 1.4072 per dollar, firmer than Thursday’s close of 1.4016.
“We see the rupee very rangebound in the near term. It may break to 44.90 levels but it will take time. The crude is at high levels,” said Naveen Raghuvanshi, an associate vice president at Development Credit Bank.
Brent crude rose more than $1 to stand above $116 on fears of rising geopolitical tensions in the oil-rich Middle East and North Africa, after the UN approved military action to curb Libyan leader Muammar Gaddafi.
India imports about 80% of the oil it consumes and oil refiners are the biggest buyers of dollars in the currency market.
Vikas Chittiprolu, a senior forex dealer with Andhra Bank, said he expected the rupee to trade in 45.00-45.15 range during the day.
The one-month onshore forward premium was at 34.25 points, higher than 30.25 on Thursday, while the three-month premium rose to 84.00 points from 82.50 and the one-year climbed to 289.50 from at 284.50.
The one-month offshore non-deliverable forward contracts were quoted at 45.40, weaker than the onshore spot rate.
The main stock index fell more than 1 percent, raising the prospect for more foreign fund outflows.
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 45.2125, with the total traded volume at about $1.4 billion.