MUMBAI The rupee snapped a three-day winning streak on Monday as importers, including oil and gold firms pumped up dollar purchases, while weak domestic shares failed to offer much respite.
Traders said there was heavy dollar demand from oil firms, the largest buyers of dollars in the domestic currency market, in opening trade and present intermittently through the day.
"There was demand from gold and oil importers along with stops getting triggered," said Vikas Babu Chittiprolu, a senior foreign exchange dealer with state-run Andhra Bank, referring to stop-losses in the dollar.
"The pair is likely to trade choppy keeping an ear out for news/views/rumours on FDI in multi-brand retail discussions. The pair may broadly hold in a 54.05 to 54.75 range this week," he added.
The government bowed to intense opposition pressure and agreed last Thursday to a vote on its decision to let foreign supermarkets set up shop in India, taking a major step towards ending a deadlock that has paralysed parliament for days.
The debate will begin on Tuesday in the lower house, with voting likely the next day, members of parliament told reporters. A vote will also take place in the upper house.
The partially convertible rupee closed at 54.77/78 per dollar, 0.9 percent weaker than its Friday's close of 54.26/27.
India's main indexes fell on Monday, retreating from 19-month highs, as recent outperformers such as HDFC Bank (HDBK.NS) were hit by profit-taking on worries over parliament's impending vote on foreign direct investment.
Traders said the euro's gains versus the dollar, however, helped limit further falls in the domestic unit.
The euro rose to a six-week high against the dollar on Monday as investors unwound short bets on falling peripheral euro zone bond yields and on signs Germany may be open to a Greek debt write-down.
In the offshore non-deliverable market, the one-month contract was at 55.06 while the three-month was at 55.59.
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 54.90 with a total traded volume of $5.87 billion. (Editing by Anand Basu)
Trending On Reuters
Indian companies are posting their best earnings results since PM Narendra Modi swept to power two years ago, giving the clearest sign yet that India's fast, but patchy, economic growth is becoming more broad-based. Full Article