Rupee up for fourth straight week; more gains likely
MUMBAI (Reuters) - The rupee closed marginally stronger on Friday and strengthened for a fourth straight week with dollar inflows into the domestic share and debt markets boosting the local unit with traders now awaiting the U.S. non-farm payrolls for direction.
Traders expect foreign fund inflows into the local sharemarket to continue in the near term especially ahead of the upcoming stake-sale by the government in state-owned power producer NTPC on February 7.
Foreign funds have bought more than $4.5 billion worth of shares and debt in January, helping the rupee gain 3.3 percent in the first month of 2013, making it the best performing Asian currency.
"I expect the rupee to trade with a positive bias next week on expected offer for sale issues attracting dollar inflows. The opening cues would be, however, from the non-farm payrolls data in the United States today," said Vikas Babu Chittiprolu, a senior forex dealer at Andhra Bank.
"I expect the rupee to move in a 52.50 to 53.50 range next week," he added.
The partially convertible rupee closed at 53.19/20 per dollar versus its previous close of 53.2150/2250. The pair moved in a wide range of 53.165 to 53.405 range during the day.
Traders expect good dollar demand from all quarters of the market if the rupee tries to breach the 53 mark.
If the dollar inflows for the stake sale are large enough, the rupee may breach the 53 mark, they said.
The rupee's fall during the first half of the day was accentuated by losses in the Korean won which hit a three-month low against the dollar as investors covered short positions in the greenback on a weaker yen and ahead of the key U.S. jobs data later in the day.
Seoul's threat to impose a broad tax on financial transactions earlier this week is the first sign of deepening concerns in Asian that speculation of competitive currency devaluation is prompting investors to head for the exit.
Domestically too, the equity market remained weak, with the Sensex closing down 0.6 percent after sudden slump in Tata Motors and UltraTech Cement(ULTC.NS) shares just 23 minutes before closing spooked investors. (Read story, click here)
In the offshore non-deliverable forwards, the one-month contract was at 53.48 while the three-month was at 54.06.
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 53.42 with a total traded volume of $4.71 billion.
(Editing by Anand Basu)
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