Extending losses for the fourth session the rupee fell by four paise to close at 45.03/04 against the U.S. currency despite bullish local equities on the back of month-end dollar demand.
Month-end dollar from importers, mainly oil refiners, to meet their monthly requirements put pressure on the rupee, dealers said.
Increased capital inflows and weak dollar in European markets, however, limited the rupee fall to certain level.
The Bombay Stock Exchange Sensex gained 172 points to close at two-week high of over 18,412 points as investors bought oil stock after fuel price hikes, on hopes that the move will improve sectoral earnings, ignoring fears that it might also add to inflationary pressures.
FIIs poured in $335.03 million in last two trading sessions of the preceding week.
Alpari Financial Services (India) CEO Pramit Brahmbhatt said, “Initially dollar gained against major currencies like EUR, GBP and JPY in Asian markets, but fell in Europe. It also traded strong against rupee and touched a one-month high in spite of positive local equities“.
“Expect the Rupee to trade around 45.00 levels and the trading range for the USD/INR will be 44.80 to 45.30 tomorrow,” he added.
Abhishek Goenka CEO India Forex said, “We maintain a bearish view in rupee against the dollar due to negative local fundamentals like outflows, increasing external debts, recent political and financial distress etc while the end of QE2 would lead to outflow of dollars from various emerging markets like India, China, Brazil etc.”