Mumbai: After touching an 11-month low of 56.50 per dollar, rupee is unlikely to weaken further and may trade in 56-level this week, experts said.
"Last week, the depreciation of rupee had come in the wake up strengthening of dollar against all major currencies. Also, domestic factors like high current account deficit (CAD), GDP numbers and demand for dollars for defence buying and oil importers contributed to this.
"However, as some of these negatives are likely to be absent going ahead, rupee is likely to claw back to 56 level," P Paramasivam, General Manager of Corporation Bank who looks after treasury operations, told PTI.
He said perception on CAD would drive the rupee movement in the near term.
Taking cues from the massive fall in equities, rupee declined by 12 paise to end at 11-month low of 56.50 against the US dollar on Friday amid worries over India's current account deficit and GDP growth, which hit a decade low of 5 percent in FY13.
Last month, the Indian unit witnessed its worst decline (4.8 percent) in the last 12 months.
"Further depreciation of rupee from 56.50 level seems to be little remote next week. However, the situation is little dicey to predict future movement," Chief Currency Strategist of Geojit Comtrade, Hemal Doshi, said.
He, however, added if rupee breaches 56.40 level next week, then it is likely to appreciate in the near term.
Doshi said if global market remained stable, rupee would get some support as most of the negative news concerning domestic economy had been factored last week.
IDBI Bank treasury head N S Venkatesh had earlier said the domestic currency was likely to be under pressure in the near term and would find support on stabilisation of global factors.
First Published: Sunday, June 02, 2013, 15:56