* Rupee ends at 55.0950/1050 vs 55.06/07 on Fri
* Traders cite continued dollar bids from oil firms
* Break of 55.25 can push rupee down to 56-dealer
By Swati Bhat
MUMBAI, Nov 20 The Indian rupee closed slightly
weaker on Tuesday, ending above 55 to the dollar for a third
consecutive session, hurt by weakness in domestic shares and by
demand for the greenback from oil companies.
Traders said they will closely monitor the winter session of
parliament due to start on Thursday, which comes amid worries
about the government's ability to contain the fiscal deficit at
5.3 percent for the year ending in March.
Confidence about the government's resolve in shoring up its
finances could improve the outlook for the rupee, which has
weakened 6.9 percent since hitting a six-month high of 51.32 in
"It has been a very ranged market. The winter session of
parliament will impact stocks, and thereby the INR as well, but
hovering around 55 is not very good for INR," said Paresh Nayar,
head of fixed income and forex trading at First Rand Bank.
"Any move above 55.25 may trigger further fall towards
56.00, so I will be more comfortable with INR moving towards
54.30. The fact that trade deficit is at an all time high and
crude demand is nearly $725,000 per day, on average, is putting
pressure on INR," he added.
The partially convertible rupee closed at
55.0950/1050 versus its previous close of 55.06/07 as per the
SBI closing rate.
India's trade deficit widened to a record $20.9 billion in
October, a particular concern given the country suffers from a
wide current account deficit.
Oil firms, the largest buyers of dollars in the domestic
currency market, were spotted buying the greenback persistently
this week, traders said.
In the offshore non-deliverable forwards market, the
one-month contract was at 55.34 while the three-month was at
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 55.13
with a total traded volume of $4.3 billion.
(Editing by Rafael Nam)