Rupee down 6 paise against dollar at 55.34
Mumbai: In volatile trade, the rupee on Monday softened by six paise to settle at 55.34 against the US dollar due to demand for the US currency from oil importers.
The rupee commenced higher at 55.25 a dollar at the Interbank Foreign Exchange (Forex) market compared to Friday's close of 55.28. It improved further to day's high of 55.19 on dollar selling by exporters amid sustained capital inflows into the stock market. Weak dollar overseas also boosted the rupee sentiment in early trade, said forex traders.
However, it turned negative in the late morning session on dollar demand from importers amid hesitancy in local shares. Thereafter, rupee touched a low of 55.47 a dollar.
With shares recovering in the fag end and US dollar losing momentum in the international market, the rupee rebounded to settle at 55.34, a drop of six paise over the previous close.
FIIs pumped in nearly Rs 340 crore in stocks today as per provisional data on stock exchanges.
The euro gained for the first time in five days against the dollar. "The rupee movement was in line with Euro coupled with demand for dollars from importers along with equity market. However, rupee is showing appreciating bias as of now," said Hemal Doshi, Currency Strategist, Geojit Comtrade.
The dollar index was down by about 0.33 percent against a basket of major global currencies. New York crude oil was trading at around USD 94 a barrel in Europe Monday over tension between Iran and Israel.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: "It seems that the rupee is discounting tomorrow's WPI."
Meanwhile, the stock market benchmark Sensex which moved in a very narrow breadth till late mid-session, recovered later to close over 75 points up.
The negative July inflation figure is likely to affect the rupee further and it may reach 55.50 and plus levels, said Abhishek Goenka, Founder & CEO, India Forex Advisors.
The premium for the forward dollar ended steady on payment pressure from banks and corporates.
The benchmark six-month forward dollar premium payable in January closed at its last Friday's level of 176-178 paise.
The premium for far-forward contracts maturing in July inched up to 326-328 paise from 325-327 paise.
The RBI fixed the reference rate for the US dollar at 55.4180 and for euro at 68.0311.
The rupee fell back against the pound sterling to close at 86.88 from last weekend's close of 86.25. It also turned negative to 68.34 per euro from 67.81.
The rupee also dropped against the Japanese yen to 70.70 per 100 yen from the last close of 70.48.