Rupee recovers after touching 2-month lows, ends 7 paise up
After falling to over two-month low levels in early trade, the rupee today closed 7 paise higher at 54.73 against the US dollar on fresh selling of the American currency by exporters and moderate FII inflows.business Updated: May 13, 2013 18:35 IST
After falling to over two-month low levels in early trade, the rupee on Monday closed 7 paise higher at 54.73 against the US dollar on fresh selling of the American currency by exporters and moderate FII inflows.
At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced lower at 54.88 a dollar from previous close of 54.80.
It soon dropped to the day's low of 55.02 on weakness in local stocks and sustained dollar demand from importers.
The rupee got a support over 55-level and it bounced back to a high of 54.70 before settling at 54.73, a net rise of seven paise or 0.12%. In last three trading sessions, it had dipped by 66 paise or 1.21%.
Traders said the rupee was seen sidelining the positive retail inflation and concentrated more on the vulnerable trade deficit data. However, the local currency finally ended up.
Rupee had last touched 55-level on March 4 this year to a low of 55.15.
The benchmark S&P BSE Sensex on Monday tanked by over 430 points or 2.14% while FIIs pumped in Rs 244 crore, as per provisional data with stock exchanges.
The dollar index was last trading up by 0.04% against a basket of six major global rivals.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said, "Rupee recovered from its early weakness and snapped its losing streak today despite weak stock market and strong dollar in the international market. Gold importers are taking buying positions in dollar to purchase gold on the occasion of Akshaya Tritiya limited the rupee rise. We expect rupee to trade in the range of 54.60 levels to 55.20 levels in the next trading session."
"The rupee was seen hitting the psychological mark of 55.00 levels today, as it fell below its two-month low against the US dollar. There were certain global factors which contributed to this fall such as Euro sustaining below $1.30 and Dollar index sustaining above 83.00 levels," said Abhishek Goenka, founder and CEO, India Forex Advisors.
Meanwhile, country's merchandise exports grew by 1.6% in April this year while imports increased by 10.9%, widening the trade deficit following rise in gold imports.
The premium for the forward dollar closed stable to firm on stray paying pressure from banks and corporates.
The benchmark six-month forward dollar premium payable in October ended at 164-165 paise from last weekend's close of 164-166 paise. Far-forward contracts maturing in April moved up to 327-1/2-329 paise from 325-327 paise.
The RBI fixed the reference rate for the US dollar at 54.9150 and for the euro at 71.3167.
The rupee improved further against pound sterling to 84.14 from last Friday's close of 84.32 and also edged up to 71.06 per euro from 71.14.
It, however, fell back against the Japanese yen to 54.17 per 100 yen from previous close of 53.89.