Rupee snaps 5-week losing streak; closes at 62.87 Vs dollar
Mumbai: The Indian rupee broke its five weeks losing string and closed higher by 24 paise at 62.87 against the US dollar during the week under review following fresh dollar selling by exporters and some banks despite weak local equities.
Foreign funds inflows also aided the rupee to recover some lost ground.
At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced higher at 62.85 per dollar from last weekend's close of 63.11 and improved further to a high of 61.87 on the back of strong equities at initial stages amid dollar selling by exporters.
The rupee rose initially, aided by increased capital inflows and RBI Governor Raghuram Rajan's comments that there is no fundamental reason for the currency to fall again.
Weak dollar overseas in the wake of dovish testimony by Federal Reserve chief nominee Janet Yellen, which indicated tapering of the stimulus programme may be delayed, also helped the rupee recovery.
However, the rupee fell back to a low of 63.0850 on dollar demand from importers, mainly oil refiners, to meet their month-end requirements and also fresh capital outflows.
Weak local stocks after mid-week also put pressure on the rupee in the later part of the week before settling at 62.87, still showing a rise of 24 paise or 0.38 percent. In past five weeks, it had plunged by 204 paise or 3.23 percent.
The BSE benchmark Sensex tumbled by 182.03 points or 0.89 percent in the week while FIIs bought shares worth USD 308.81 million on the first four days of the week as per Sebi data.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said, "To start the week, Rupee traded strong taking cues from the local equities which rose more than 2 percent on Monday, to mark their biggest single-day gain in a month, tracking gains in other Asian markets, cheered by the prospect of extended stimulus in the US and real economic reform in China."
"But in the second half of the week, Rupee depreciated and gave up part of its gain taking cues from dollar which traded strong after the minutes from the US Federal Reserve's October policy meeting suggested that the central bank could soon move to taper monetary stimulus.
"Resistance for USDINR (Spot) pair is at 63.40 - 63.50 levels; if these levels are breached convincingly then expect Rupee to depreciate further over 64.00 levels. The trading range for the USD/INR pair for the week is expected to be within 62.00 to 64.00," he added.
The premium for the forward dollar declined on fresh receipts by exporters.
The benchmark six-month forward dollar premium payable in April ended lower at 239-241 paise from last weekend's close of 246-248 paise and far-forward contracts maturing in October eased to 485-487 paise from 486-488 paise.
The RBI fixed the reference rate for the US dollar at 63.0236 and for the euro to 84.9199 from 63.0645 and 84.9475 last weekend, respectively.
The rupee remained weak against the pound sterling to 101.82 from last weekend's close of 101.05 and also moved down further against the euro to 84.98 from 84.74.
It, however, hardened further against the Japanese yen to 62.12 per 100 yen from preceding weekend's close of 63.14.