Rupee snaps two-day rally, down 16 paise at 54.36
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Rupee snaps two-day rally, down 16 paise at 54.36

Last Updated: Thursday, November 08, 2012, 18:05
 
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Rupee snaps two-day rally, down 16 paise at 54.36
Mumbai: Tracking weak global markets and euro's fall to a two-month low, the rupee Thursday cut short two-day rally losing 16 paise to settle at 54.36 against the US dollar on heavy demand for the American currency from banks and importers.

While the US dollar continued to steam ahead, buoyed by jitters over Europe's debt crisis, sustained capital inflows worth USD 50 million from FIIs restricted the rupee's fall to some extent, said forex dealers.

At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed sharply lower at 54.55 a dollar from overnight close of 54.20. It immediately dropped further to a low of 54.67 on heavy dollar demand from importers and early steep fall in local stocks.

Later, rupee recovered on smart rebound in domestic stock market to a touch a high of 54.31 before finishing at 54.36 -- still showing a fall of 16 paise or 0.30 percent. In last two days, rupee had surged by 41 paise or 0.75 percent.

"The rupee's fall can be attributed to weak global markets and the steep fall in Euro against the dollar," said Ashtosh Raina, Head - Forex Trading, HDFC Bank.

The euro remained under pressure, falling to over USD 1.27, its lowest intraday level since September 7, but was eased a tad higher after reports said the Greek parliament passed USD 17 billion package of extra austerity measures.

Traders said the rupee could not sustain Wednesday's momentum today after US equity markets sharply fell.

The dollar index was up by 0.16 percent against a basket of six major global rivals while New York crude oil was quoting above USD 85 a barrel in Europe Thursday.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said," The rupee traded on a mixed note tracking risk aversion sentiments in global markets".

Meanwhile, the Indian stock market benchmark Sensex, which was down by nearly 166 points in early stages, recovered later to close down by only 56.15 points.

"The Greece factor also weighed on the single currency even though after passing of the austerity vote," Brahmbhatt added.

On the rupee outlook, Abhishek Goenka, Founder & CEO, India Forex Advisors said: "We expect the market to remain volatile ahead of the key events lying in the month of November which include India's IIP and inflation data followed by GDP at the month end."

Meanwhile, the premium for the forward dollar closed sharply lower on fresh receipts by exporters.

The benchmark six-month forward dollar premium payable in April settled down at 154-156 paise from Wednesday's close of 161-163 paise.

Far-forward contracts maturing in October also reacted downwards to 292-1/2-294-1/2 paise from 299-301 paise.

The RBI has fixed the reference rate for the US dollar at 54.4403 and for euro at 69.4755.

The rupee also fell back slightly against the pound sterling to 86.73 from Wednesday's close of 86.67. It dipped against the Japanese yen to 68.09 per 100 yen from 67.54.

Rupee, however, remained firm against the euro to 69.28 from last close of 69.48.

Meanwhile, FIIs pumped in USD 137.29 millio yesterday as per SEBI data.

PTI


First Published: Thursday, November 08, 2012, 18:05


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