Rupee pulls back from 2-week highs on dollar gains

Rupee pulls back from 2-week highs on dollar gains

Mumbai: The Indian rupee fell on Friday, pulling back more than two-week highs in the previous session as weakness in the local sharemarket and a stronger dollar weighed on sentiment.

At 10:10am, the partially convertible rupee was at Rs46.26/27 per dollar, 0.4% weaker than its Thursday’s close of Rs46.07/08, which was its strongest since 16 November.

“Rupee opened with a gap due to the strong dollar, market is now watching stocks for further direction," a senior dealer with a private bank said. “It is likely to trade in at 46.15-46.40 range today."

Dealers said a further weakness in the Indian rupee could lead to receiving interest in the forwards, pushing premiums lower. One-month forward premium was lower at 8.25 points, compared to 9.00 points on Thursday.

Shares fell more than 0.7% after weak US data triggered concerns over the pace of economic recovery and pushed most Asian stocks lower.

Foreign portfolio flows of almost $16 billion into Indian equities this year have helped the rupee rise more than 13 percent from a record low of 52.2 in early March.

The index of the dollar, against six major currencies, was up 0.2%.

One-month offshore non-deliverable forward contracts was quoted at Rs46.17/27, little stronger than the onshore spot rate.