Indian rupee snaps three-day gains as euro falters

Fri Nov 2, 2012 5:34pm IST

Related Topics

Stocks

   

* INR ends at 53.8050/8150 per dlr vs pvs 53.6950/7150

* Dollar demand from oil, gold importers also hurts rupee

* Gains in local shares, however, limit further fall

By Swati Bhat

MUMBAI, Nov 2 (Reuters) - The Indian rupee snapped a three-day winning streak after hitting a one-week high early in the session on Friday as sharp losses in the euro prompted banks to cover their short dollar positions heading into the weekend.

The euro fell to a three-week low against the greenback, pushing the dollar index to a seven-week high, with traders citing option-related selling of the euro by macro investors.

"The market is getting thinner and moves have been usually tracking the flows. In the morning there were moves tracking flows, but later we started tracking the euro," said Paresh Nayar, head of fixed income and forex at First Rand Bank.

Nayar added, "54.20 seems like a good resistance for the USD/INR and if that holds, 53.20 can be seen".

The partially convertible rupee closed at 53.8050/8150 per dollar versus its previous close of 53.6950/7150. It had hit 53.61 earlier in the session, its strongest since Oct. 25.

The rupee lost 0.2 percent on the day, taking its fall to 0.5 percent on the week.

Traders said a further fall in the rupee was averted by gains in the local share market. Foreign fund inflows into the domestic share market are a key determinant of the rupee's fortunes.

Shares ended up 1 percent, helped by select buying in recent underperformers such as ITC Ltd and Larsen and Toubro as the global risk environment improved on the back of better-than-expected U.S. economic data.

Foreign funds have bought more than $18 billion of shares so far in 2012.

"Markets are uncertain about the winter session of Parliament, US election results and Greece. I see a higher probability of USD/INR moving towards 53.00/52.50 compared to 55.00," said Samir Lodha, managing director at QuantArt Market Solutions.

"I see the government being committed to ensuring capital inflows and that should help the rupee."

In the non-deliverable forwards market, the one-month contract was at 54.14 while the three-month was at 54.70.

In the currency futures segment, the most traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 54.0850, with a total traded volume of $3.56 billion. (Editing by Subhranshu Sahu)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Fuelling Change

REUTERS SHOWCASE

NSEL Fraud

NSEL Fraud

Govt orders Financial Tech to absorb NSEL, liabilities  Full Article 

Quarterly Result

Quarterly Result

HDFC Bank net profit up 20 percent, lags estimates.  Full Article 

JLR China

JLR China

JLR sees 20 percent growth in China sales this year - exec  Full Article 

China Economy

China Economy

China's growth slowest since global crisis, annual target at risk  Full Article 

Coal Reforms

Coal Reforms

Factbox - India pushes ahead with coal reforms  Full Article 

Apple Result

Apple Result

Apple's iPhone sales beat Street but iPad volumes slide  Full Article 

Airport Accident

Airport Accident

Total CEO de Margerie killed in Moscow business jet accident  Full Article 

Nadella's Paycheck

Nadella's Paycheck

New Microsoft CEO Nadella's pay tops $80 mln with big stock awards.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage