India rupee down for 2nd day; falls in first week of 2013

Fri Jan 4, 2013 5:14pm IST

Related Topics

* Rupee ends at 55.07/08 per dlr vs 54.49/50 Thurs close

* Combined dlr demand from oil, defence, corporates hurts

* INR may depreciate further from current levels-trader

By Swati Bhat

MUMBAI, Jan 4 (Reuters) - The Indian rupee weakened for a second session on Friday on the back of dollar demand from oil and defence firms as well as other companies while the global risk-off mood also prompted short-covering of dollar positions.

Broad optimism seen over the U.S. "fiscal cliff" deal at the start of 2013 began to fade after Federal Reserve officials raised concerns about possible side effects of the stimulus progamme, dragging global shares lower.

The tepid weekly performance in the rupee comes after data on Monday showed the current account deficit widened to a record high in the July-September quarter, reviving worries about India's twin deficits and potentially constraining the rupee's gains.

"I expect the rupee to depreciate further from here. We may see 55.40-45 levels next week. We have to watch the flows into the stock market after new year hoildays. Until then rupee can trade lower," said Hari Chandramgethen, head of forex trading at South Indian Bank, predicting a range of 54.70-55.50 next week.

The partially convertible rupee closed at 55.07/08 per dollar, 1.05 percent weaker compared to its close of 54.49/50 on Thursday. The unit closed down 0.15 percent on the week.

Traders said sharp gains in the dollar versus major currencies triggered some short-covering while there was also a corporate outflow of $50 million, which added to the selling pressure on the rupee.

The dollar index against six major currencies was trading up 0.56 percent when the local market closed.

The weaker rupee this week comes despite a solid performance in domestic shares, with indexes posting their biggest weekly gains since the week ended on Nov. 30, while bonds rallied on expectations of interest rate cuts this month.

In the offshore non-deliverable forwards, the one-month contract was at 55.39 while the 3-month was at 55.96.

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 55.33 with a total traded volume of $5.3 billion. (Editing by Sunil Nair)

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

  • Most Popular
  • Most Shared

Trade Deal


Record High

Record High

Nifty hits record high on foreign buying, higher Asian stocks.  Full Article 

Bullish on Equities

Bullish on Equities

Bullish on Indian equities, but gains seen 'less sharp'- Goldman Sachs  Full Article 



World Bank chief welcomes new BRICS development bank.  Full Article 

Streamlining Operations

Jet Streamlines

Jet Airways chairman says looking to restructure debts, talking to bankers  Full Article 

Political Economy

Political Economy

Analysis - Watch what markets don't do as world politics turns nasty   Full Article 


Honda's India Thrust

Honda's India unit to account for 25 pct of Asia Pacific sales by March 2017 - exec   Full Article 

 Boosting Output

Boosting Output

NMDC plans to boost iron ore output by two-thirds  Full Article 

Apple Results

Apple Results

Apple margin concerns fade, focus shifts to iPhone launch  Full Article 

Reuters India Mobile

Reuters India Mobile

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