* Rupee ends at 52.87/88 per dlr vs 53.015/0250 prev close
* Global economic indicators boost risk appetite
* Domestic factors constrain rupee gains
By Subhadip Sircar
MUMBAI, Oct 17 The Indian rupee rose on Tuesday,
snapping a two-session losing streak as demand for global risk
assets was bolstered by better-than-expected U.S. and German
economic indicators, and talk Spain may soon ask for a bailout.
However, domestic factors capped broader gains, given
concerns about whether the Reserve Bank of India will cut
interest rates on Oct. 30, thus potentially bolstering growth
while increasing foreign investor inflows into Indian assets.
Whether the RBI will respond to the government's fiscal and
economic measures remains uncertain. Deputy governor H.R. Khan
said on Tuesday monetary policy and fiscal policy must work in
tandem, slightly raising expectations for rate
"Any rate cut will give the rupee a boost. The RBI should
focus more on growth, which is a bigger imperative than
inflation," said Moses Harding, head of asset-liability
management at IndusInd Bank.
The partially convertible rupee closed at 52.87/88
per dollar, stronger than its previous close of 53.015/0250, as
per the State Bank of India closing rate.
The rupee tracked higher Asian currencies following the
stronger-than-expected U.S. retail sales data.
A German ZEW survey showing analyst and investor sentiment
improved, and hopes Spain would soon request a bailout,
underpinned sentiment for the local currency later in the
However, on top of caution ahead of the RBI, broader gains
were capped by profit-taking in local stocks and dollar demand
In the offshore non-deliverable forwards market, the
one-month contract was at 53.04 and the three-month at 53.53.
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 52.98
with a total traded volume of around $4.5 billion.
(Editing by Rafael Nam)