* 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 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
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
"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)