Rupee extends rise on corporate dollar sales

Rupee extends rise on corporate dollar sales

Mumbai: The Indian rupee extended gains to fresh three-week highs on Tuesday afternoon tracking the dollar’s weakness versus major currencies while some corporate dollar sales also helped.

At 1:45pm, the partially convertible rupee was at 44.72/73 per dollar, after hitting 44.7050, its strongest since 12 November and above 44.95/96 at close on Monday.

Traders see the local unit heading towards 44.50-44.20 levels and then a move back up to 45. They also added one large corporate was unwinding long dollar positions on back of the rupee’s rally over the last six sessions.

Dealers, however, expect importers to come in to buy dollars around 44.80. Oil is India’s biggest import and refiners are the largest buyers of dollars in the domestic currency market.

The euro won a slight reprieve on Tuesday, though it was still dogged by worries over debt problems in the euro zone, while the dollar slipped to a three-week low against the yen after breaking below key chart levels.

The index of the dollar against six major currencies was down 0.24% at 79.380 points.

Indian shares were trading flat after having been down more than 0.6 percent earlier.

One-month offshore non-deliverable forward contracts were quoted at 44.96, 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, MCX-SX and United Stock Exchange were all at 44.92 with total traded volume on the three exchanges at $3.3 billion.