Rupee largely steady; dollar, share moves eyed

Rupee largely steady; dollar, share moves eyed

Mumbai: Rupee continued to trade slightly stronger on Thursday afternoon tracking gains in domestic shares but some dollar demand from importers pulled it off more than one-week highs reached earlier in the session.

At 2:10pm, the partially convertible rupee was at 45.33/34 per dollar, slightly up from its 45.37/38 close on Wednesday. In early deals, the unit rose as high as 45.21, its strongest since 22 November.

Shares were up 0.7% on Thursday, tracking strong Asian markets and buttressed by hopes for stronger growth outlook for domestic economy and corporate earnings.

A strong GDP growth number for the September quarter released on Tuesday continued to cheer the stock market, in turn aiding in the rupee’s rise.

India’s economy grew faster-than-expected in the second quarter of 2010/11, boosted by farm output and manufacturing, putting pressure on the Reserve Bank of India to tighten monetary policy although a rate hike next month looks unlikely.

The euro sat tight after surging the previous day, as investors waited to see if European Central Bank policy makers meeting later on Thursday would take any measures to alleviate worries over euro zone debt.

The dollar index, which tracks the greenback’s performance against a basket of other major currencies, was little changed and would be watched for cues, dealers said.

In the currency futures market, the most traded near-month dollar-rupee contract on the National Stock Exchange, MCX-SX and United Stock Exchange were at 45.5375, 45.54 and 45.5425 respectively, with the total traded volume on the three exchanges at a low $3.6 billion.