Rupee off day’s high as euro slips

Rupee off day’s high as euro slips

Mumbai: The rupee continued to trade higher in afternoon trades on Friday aided by positive shares, but came off the day’s high as the euro slipped.

At 2:20pm, the partially convertible rupee was at 45.9200/45.9250 per dollar, 0.4% stronger than Tuesday’s close of 46.085/095, after touching a high of 45.8675 in early trades.

The main stock index was trading about 0.5% higher on improving foreign fund demand for beaten-down shares.

The euro slipped against the dollar and tumbled against the Swiss franc on Friday, as concerns about the euro zone’s debt crisis and economic outlook after weak manufacturing data forced macro funds to sell and seek the relative safety of the franc.

Traders expect the rupee to trade in a 45.80-46.00 band, with activity muted ahead of the weekend.

The index of the dollar against six major currencies was at 74.528 points, above 74.129 at the close of local trade on Tuesday.

The euro was at $1.4245, lower than $1.4399 at the close of domestic trade on Tuesday.

The central bank, which has raised rates 11 times since March 2010, is expected to increase rates again when it reviews policy on 16 Septeber. Traders said the higher rate differential should attract more foreign funds looking for better returns.

Traders forecast a 45.80-46.00 band for the rupee, with activity muted ahead of the weekend.

“There won’t be big trading today. The market will move based on the flows," a dealer with another state-run bank said.

The one-month onshore forward premium was at 8.25 points from 7 on Tuesday, the three-month was at 34 points from 31.75 and the one-year stood at 131 points from 126.

The one-month offshore non-deliverable forward contracts were quoted at 45.98, 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 45.9550. The total volume was at $1.44 billion.