Rupee eases but trades in tight band

Rupee eases but trades in tight band

Mumbai: The Indian rupee eased on Thursday, moving in a narrow band on a spurt in dollar demand from importers, but the US Federal Reserve’s pledge to keep rates low checked the losses.

At 10:30am, the partially convertible rupee was at Rs46.25/26 per dollar, compared with Wednesday’s close of Rs46.17/18 per dollar. It traded in a band of Rs46.18 to Rs46.2850.

“I mostly see a range of Rs46.15 to Rs46.30 for the rupee. Sentiment is positive though there was some early demand from importers, which eased the rupee," said a senior dealer with a foreign bank.

Local stock markets traded higher. Foreign funds have bought a net $1.6 billion worth of shares in June after dumping around $2 billion in May. The flows have a large impact on the rupee’s fortunes and are watched by investors.

Foreigners are net buyers of $6.2 billion in 2010.

The dollar index was down 0.1 percent against six majors. The dollar eased after the Fed scaled back its assessment of the pace of US recovery, noting pockets of weakness and cautioning on volatile markets due to the euro zone crisis.

One-month offshore non-deliverable forward contracts were quoted at Rs46.37, weaker than the onshore spot rate.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were at 46.2575 on both the exchanges, with the total traded volume more than $1 billion.