Rupee down on euro fall; factory data, dollar inflows eyed

Rupee down on euro fall; factory data, dollar inflows eyed

Mumbai: The rupee fell on Thursday tracking weak local shares and the euro’s losses against the dollar, but hopes of robust dollar inflows towards a state-run firm share sale are seen supporting.

At 10:56 am, the partially convertible rupee was at 44.78/79 per dollar, down from previous close of 44.69/70.

“If the rupee falls below 44.80 convincingly, then we could see slide down to 44.90 level as impact of the negative factors will magnify," said a forex dealer with a foreign bank.

The rupee has moved in 44.75-44.8225 range, so far in the day.

“The euro looks set to be weak for some more time. So we need to see how inflows towards the PFC (Power Finance Corp) turn out as it closes," said a forex trader at another foreign bank.

The euro was at $1.4224 at 11:30 am. It was at $1.4365 at the end of trade in local forex market on Wednesday.

The index of the dollar against six major currencies was down 0.15% at 75.216 points, from its 74.603 points previous close.

Indian shares dropped 0.5% in early trade on Thursday, tracking weak Asian markets, with financials leading the decline.

The factory output data for March due around 11:00 am may also impact the rupee, traders said.

Industrial output probably rose 3.8% in March from a year earlier, helped by strong exports and infrastructure output but weighed by a high base effect, the median forecast in a Reuters poll showed.

Power Finance, which opened its share sale on Tuesday, intends to raise up to $1 billion. The offering closes on Thursday for institutional investors and a day later for retail bidders.

The one-month onshore forward premium was at 26.25 points versus 26.35 points last close. The three-month was at 79 points against 82.50 points and the one-year was at 298 points compared with 305 points.

The one-month offshore non-deliverable forward contracts were quoted at 45.06, 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 44.9050, with total volume at $1.67 billion.