India rupee snaps five-day fall; seen ranged near-term

Wed Dec 19, 2012 5:18pm IST

Related Topics

* Rupee ends at 54.55/56 per dlr vs 54.85/86 on Tues

* All-round dlr demand from oil, gold and defence firms seen

* Dlr sales by Power Fin Corp, exporters help rupee

By Swati Bhat

MUMBAI, Dec 19 (Reuters) - The Indian rupee snapped a five-day losing streak on Wednesday as dollar sales by a power sector financing firm helped offset demand from oil and gold importers while positive domestic shares also aided.

Traders said gold importers were spotted buying the greenback to pay for their purchases, especially since the yellow metal remained within sight of almost four-month lows in the global market.

Gold prices in India extended losses to their lowest in nearly two weeks on the back of a stronger rupee, which prompted some bargain buying by importers in the wedding season.

"Defence demand has been on the higher side these days along with the normal oil demand. But there were some inflows heard from a power sector financer," said A. Ajith Kumar, a foreign exchange dealer with Federal Bank.

"Think the rupee may now consolidate between 54 and 55 levels for some time," he added.

Other traders also attributed the dollar inflows of around $300 million to Power Finance Corp. PFC was likely to raise $500 million via mid-term notes this week at the earliest, chairman Satnam Singh had said last week.

The partially convertible rupee closed at 54.55/56 per dollar versus its previous close of 54.85/86. The unit moved in a range of 54.4850 to 54.93 during the session.

Traders said gains in the euro and other Asian peers also supported sentiment for the rupee.

The euro hit a 16-month high against the yen and 7-1/2 month peak against the dollar on Wednesday, helped by better-than-expected German business confidence data.

Local shares rose for a second consecutive session, marking their highest close in almost two weeks, led by IT stocks such as Infosys after recent losses were seen as overdone with hopes of a resolution to the "U.S. cliff" standoff also likely to improve the outlook for the sector.

"The sentiment was broadly positive rupee today but there was the usual oil and defence demand in early trade. Gold demand was also strong today. Rupee is unlikely to strengthen much from here though, as month and year-end demand will again push it lower," the treasurer at a large state-run bank said.

In the offshore non-deliverable forwards market, the one-month contract was at 54.91 while the three-month was at 55.43.

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 all closed at around 54.72 with a total traded volume of around $4.65 billion. (Editing by Sunil Nair)

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
Sensex up over 300 points on energy reform, elections

Sensex up over 300 points on energy reform, elections

The BSE Sensex surges over 300 points and the Nifty gains more than 100 points after the government's energy reforms lead to a rally in energy firms, while wins by Prime Minister Narendra Modi's party in two state elections raise expectations for additional reforms.  Full Article 

REUTERS SHOWCASE

State Elections

State Elections

Modi's BJP makes big gains in state polls.  Full Article 

POSCO Plant

POSCO Plant

India delays decision on iron ore licence for POSCO's $12 bln plant.  Full Article 

HCL Tech Results

HCL Tech Results

Quarterly profit up 32 percent, shares fall   Full Article 

Ebola Vaccine

Ebola Vaccine

GSK says Ebola vaccine development progressing at "unprecedented rate".  Full Article 

Health Check

Health Check

Credibility meets compromise in Europe's bank stress test.  Full Article 

Photo

Legal Reforms

Companies look for more fairness as China eyes legal reforms at key meeting.  Full Article 

Gold Smuggling

Gold Smuggling

With seizures up, Indian gold smuggling loses its shine  Full Article 

Reuters India Mobile

Reuters India Mobile

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