Rupee off 2-month low as dollar weakness supports

Rupee off 2-month low as dollar weakness supports

Mumbai: The Indian rupee on Thursday recouped from its nearly two-month lows hit in early trades, supported by the dollar’s weakness against majors. However, oil importers’ dollar buying and choppy shares weighed.

At 2.52pm, the partially convertible rupee was at 45.32/33 per dollar, after touching 45.58, its lowest since 24 September and compared with Tuesday’s 45.31/32. The market was shut on Wednesday on account of a holiday.

Oil importers have been buying dollars to take advantage of the fall in oil prices after the 25-month high of $88.63 per barrel a week ago.

Oil rebounded from four-week lows as a weaker dollar and cautious optimism about Ireland’s debt crisis rekindled interest for commodities, while a sharp crude inventory decline in top consumer the United States supported prices.

The NYMEX crude for December delivery rose $1.55 to $81.99 per barrel.

Indian shares recouped some losses and were trading 0.2% up after falling as much as 1% earlier in the day.

The euro rose on Thursday as optimism that Ireland’s debt crisis may be easing fuelled speculative buying, but analysts said the move was likely to be short-lived, with the rally stalling ahead of key resistance.

The dollar index, which tracks the greenback’s performance against a basket of major currencies, was down 0.7% at 78.535 points, retreating from its seven-week high of 79.461 points hit on Tuesday.

One-month offshore non-deliverable forward contracts were quoted at 45.55 to a dollar, weaker than the onshore spot rate, suggesting a bearish near-term outlook.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, MCX-SX and United Stock Exchange were at 45.4025, 45.4025 and 45.4050, respectively, with the total traded volume on the three exchanges at a moderate $5.7 billion.