The rupee on Wednesday reversed early losses and ended one paisa higher at 60.12 against the US dollar as sales of the American currency by exporters, including IT firms, helped the local unit bounce back from one-week lows.
At the Interbank Foreign Exchange (Forex) market, the local currency resumed lower at 60.23 a dollar from previous close of 60.13. It then declined further to one-week lows of 60.3850 on initial dollar demand from importers, mainly oil refiners.
Lacklustre trade on the local equity markets also weighed on the rupee. The S&P BSE Sensex closed down by 55.16 points, or 0.22%. FIIs had infused Rs 284.61 crore yesterday, as per provisional data.
The rupee later bounced back to settle at the day's high of 60.12 on late dollar selling by exporters.
Anindya Banerjee, currency analyst, Kotak Securities, said: "The Indian rupee weakened at the open due to uptick in global petroleum prices. However, hedging demand from ITes sector, pushed it back up towards 60.17/18 levels on spot. PSU bids were absent in today's session and there was little inter-market effect from a largely ranged equity market." The dollar index was up by 0.03% against six major global rivals.
Militants launched a dawn raid today on a key Iraqi oil refinery they have been trying to take for days but were repelled by security forces. US benchmark West Texas Intermediate rose 17 cents to USD 106.20 a barrel while Brent crude eased 65 cents to USD 113.81 in afternoon trade.
Pramit Brahmbhatt, Veracity Group CEO said: "Traders are being cautious as growing tensions in Iraq has dented the confidence of the investors. The trading range for the Spot USD/INR pair is expected to be within 59.80 to 60.60."