Rupee snaps two-day winning trend; closes at 54.50 Vs dollar

Rupee snaps two-day winning trend; closes at 54.50 Vs dollar Mumbai: The rupee on Thursday fell for the first time in three days losing 15 paise to end at 54.50 against the dollar due to renewed demand for the US currency, especially from oil importers, amid firm global cues.

Forex dealers, however said, a rally in local equities amid increased capital inflows limited the rupee's fall to some extent.

The domestic unit commenced weak at 54.44 a dollar from previous close of 54.35 at the Interbank Foreign Exchange (Forex) market and touched a high of 54.36 in afternoon deals.

Later, it fell back to a low of 54.62 on some hesitancy in local equities and dollar buying by importers. It managed to recover some ground and settled at 54.50, a fall of 15 paise, or 0.28 percent. In the last two days, it had spurted by 64 paise, or 1.16 percent, to a nearly three-week high.

"The demand from oil importers at rupee's three-week high levels continued to erase gains in the local currency, pushing it down against the dollar, amid weakness in equities which later added minuscule gains towards the end of the session," Alpari Financial Services (India) CEO Pramit Brahmbhatt said.

Foreign institutional investors pumped in USD 256.4 million (Rs 1,397.38 crore) into the local stock markets today, according to provisional BSE data.

"The weakness in rupee was due to a sharp recovery in the dollar index as the focus now shifts to economic data and the looming US debt ceiling battle," said Abhishek Goenka, founder and CEO, India Forex Advisors.

The dollar index was up by 0.31 percent against a basket of six major global currencies, reversing losses made last night immediately following US lawmakers clinching a last-minute deal to avert the so called "fiscal cliff" for the time being.

Meanwhile, the BSE benchmark Sensex closed up by 50.54 points at 19, 19,764.78.

The benchmark six-month forward dollar premium payable in June ended a tad lower at 167-1/2-169 paise from Wednesday's close of 168-170 paise while far-forward contracts maturing in December ended at 308-1/2-310 paise from 308-310 paise.

The RBI has fixed the reference rate for the US dollar at 54.4153 and for euro at 71.4945.

The rupee shot up further against the pound sterling to 88.18 from last close of 88.65 and remained firm against the euro to 71.42 from 71.99.

It, however, fell back against the Japanese yen to 62.68 per 100 yen from previous close of 62.36.