* Rupee ends at 54.86/87 per dlr vs 54.90/91 on Friday
* Dollar sales by exporters help INR recover
* Rupee seen in a 54.60-55.50 range until end-March - trader
By Swati Bhat
MUMBAI, March 4 The Indian rupee hit the lowest
level in nearly two months on Monday before closing marginally
stronger with exporter and corporate dollar sales aiding the
recovery, though sentiment continues to remain bearish in the
Traders said disappointment over the budget last week is
likely to hurt the rupee in the near term with fundamentals such
as a record current account deficit likely to keep the downward
pressure on the currency.
On Thursday, India unveiled a surge in government spending
despite expectations of an austerity budget to shore up its
finances, while failing to announce any measures that would
significantly boost investments.
"Initial weakness in the rupee was due to the budget
disappointment. The flows helped the rupee recover despite euro
and share weakness, but we may target 55.50 later this week,"
said Subramanian Sharma, director at Greenback Forex.
"Any small corrections will be seen as an opportunity to buy
with importers rushing in to cover. I am broadly expecting a
range of 54.60 to 55.50 till March-end with the bias on the
weaker side," he added.
The partially convertible rupee closed at 54.86/87
per dollar versus its previous close of 54.90/91 on Friday. The
unit dropped earlier to a low of 55.15, the weakest since Jan.
Traders said the pair opened sharply below the 55 mark,
having closed above the 200-day moving average on Friday and
after breaking the 61.8 percent Fibonacci retracement of the
November to February decline at 54.74.
However, USD/INR should see good technical resistance at
around 55.15, ahead of the 55.89 peak in November.
Traders said the weakness in the euro and domestic shares
also hurt the rupee though good dollar selling by exporters and
a corporate helped it recover.
The euro fell to a session low on Monday and not far from a
2-1/2 month trough after eurozone sentiment tumbled in March and
added to speculation that the European Central Bank may lower
rates in the near term.
Indian shares fell to near 3-month lows as
global risk aversion sparked broad-based selling in domestic
In the offshore non-deliverable forwards, the
one-month contract was at 55.30 and 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 National Stock Exchange all closed
at 55.13 with a total traded volume of $5.9 billion.
(Editing by Jijo Jacob)