Rupee surrenders early gains to close flat Vs US dollar
Mumbai: The rupee Tuesday washed out initial gains in tandem with local equities and closed flat at 61.19 against the dollar on alternate bouts of buying and selling.
An early rally in domestic stocks amid increased capital inflows helped the rupee to resume higher at 61.02 from last Friday's close of 61.19 at the International Forex Exchange (Forex) market.
It later improved further a high of 60.88. However, it fell back on late selling in share markets and dropped to a low of 61.22, before concluding at last weekend's close of 61.19. Dollar demand from importers also later weighed on the rupee, a forex dealer said.
On Monday, the forex market was closed.
The Indian equity benchmark S&P BSE Sensex, which was up by over 230 points, closed up by a mere 22.81 points or 0.1 percent on late profit-booking. FIIs picked up shares worth a net Rs 982.19 crore last Friday.
The dollar index was up by 0.05 percent against its major global rivals on waning investor concerns over Ukraine.
Dollar demand in the local market and cautiousness ahead of the two day FOMC meeting affected the rupee, said traders.
Technically, 60.80 has been the strong support level for the USDINR pair, said Abhishek Goenka, Founder and CEO, India Forex Advisors.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: "Rupee traded strong in the morning session and appreciated by more than half a percent during the day as local equity indices posted new record high. But towards the end of the trading session, equities gave up all the gains. This weakened the rupee."
The benchmark six-month premium payable in August edged up to 235-237 paise from 235.5-237.5 paise previously.
Far forward contracts maturing in February, 2015, however, closed steady at Friday's level of 479-481 paise.
The RBI fixed the reference rate for dollar at 60.9453 for the euro at 84.8917.
The rupee fell back slightly to 101.61 against the pound from 101.58 and also declined to 85.12 per euro from 84.99. It, however, recovered to 60.22 per 100 Japanese yen from last close of 60.35.