* Rupee ends at 55.06/07 per dlr vs 54.8450/8550 on Thurs
* Losses in local shares, dlr demand from importers hurt
* INR seen in 54.10 to 55.50 broad range next week-traders
By Swati Bhat
MUMBAI, Dec 21 The Indian rupee hit a three-week
low on Friday, extending its fall for a third straight week, as
uncertainty over the U.S. "fiscal cliff" resolution dented
demand for risk assets including domestic equities.
Traders said month- and year-end dollar demand from oil and
gold importers also added to the downward pressure on the local
currency. Oil firms bought the greenback aggressively this week
while gold importers purchased the U.S. unit to take advantage
of relatively lower global gold prices.
"INR has been choppy and I expect it to remain so in the
last week as well. The U.S. fiscal agreement will be important
for the market," said Paresh Nayar, head of fixed income and
forex trading at First Rand Bank.
"54.10 is showing good support while 55.45 is the first
technical resistance. I expect the pair to hold in that broad
range next week," Nayar added.
The partially convertible rupee closed at 55.06/07
per dollar versus its previous close of 54.8450/8550. The unit
fell to a low of 55.2550, its weakest since Nov. 29.
On the week, the rupee shed 1 percent of its value, marking
its third consecutive weekly fall.
Traders said dollar sales by exporters around the 55.20 to
55.25 levels helped the rupee recover some of its losses from
the day's lows but the weakness in shares hurt.
Shares ended lower, marking a second week of
declines, as lenders were hit by profit-taking, while Bharti
Airtel fell after federal police filed charges as part of a
probe into alleged corruption in allocation of mobile airwaves.
Sentiment for the rupee has also been dented by a status quo
at the central bank's policy review earlier this week. The RBI
kept interest rates on hold on Tuesday, ignoring government
pressure to reduce borrowing costs, but said it was shifting its
focus towards boosting a flagging economy, raising the odds of a
rate cut as early as January.
Global stock markets weakened on Friday and both the euro
and gold slipped, as a new setback in talks to avert a U.S.
fiscal crisis and evidence of Europe's ongoing economic
difficulties stoked investor nerves.
In the offshore non-deliverable forward market, the
one-month contract was at 55.43 while the three-month was at
In the currency futures market, the most-traded
near-term dollar/rupee contracts on the National Stock Exchange,
the MCX-SX and the United Stock Exchange closed at around
55.1975 with a total traded volume of $5.38 billion.
(Editing by Subhranshu Sahu)