Rupee trims rise tracking shares; dollar loss aids

Rupee trims rise tracking shares; dollar loss aids

Mumbai: The rupee trimmed gains on Tuesday afternoon tracking a choppy domestic sharemarket, but the dollar’s losses versus major currencies continued to support the local unit.

At 1:40pm, the partially convertible rupee was at 45.56/57 per dollar, off the day’s high of 45.4550 but still above its close of 45.67/68 on Monday.

India’s main share index turned negative after having risen nearly 1% earlier in the day.

The euro hit a two-month high against the dollar on Tuesday, boosted by a more hawkish outlook for euro zone interest rates.

The dollar index, a measure of the greenback’s performance against six major currencies, was down 0.15% at 77.924 points.

Reserve Bank of India raised interest rates on Tuesday by 25 basis points, as expected, to clamp down on resurgent inflation, warning higher food prices could become entrenched if steps to boost output are not taken.

One-month offshore non-deliverable forward contracts were quoted at 45.86, 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 45.61, with the total traded volume at about $4.4 billion.