The rupee on Wednesday ended flat at 52.87 against the US dollar after surrendering initial gains against the US currency.
At the Interbank Foreign Exchange (Forex) market, the local unit commenced higher at 52.75 a dollar from overnight close of 52.87. It immediately touched a high of 52.65 in line with a smart rise in domestic stock market.
Continued dollar selling by exporters at initial stages and subdued dollar overseas also helped the rupee rally in the morning session.
However, late dollar demand from importers, mainly oil refiners, and weakness in local stocks weighed on the rupee.
It fell back to a low of 52.98 before ending stable at its yesterday’s closing level of 52.87.
Fresh capital outflows also put pressure on the rupee in the later part of the day, said forex dealers.
“The rupee was seen trading in a range of 30 paise for the day. We observed that the rupee was not getting strong in spite of a sharp recovery in the Euro and weakening trend in the US dollar. We expect the rupee to trade within the range of 52.00—54.00 levels for the next couple of months,” said Abhishek Goenka, Founder & CEO, India Forex Advisors.
Foreign Institutional Investors (FIIs), for the first time in the current month, sold shares worth USD 16.50 million yesterday as per Sebi data.
The Indian benchmark sensex, which was up by over 127 points in early session, trimmed gains and ended just 33 points higher at closing.
The dollar index, a barometer of six major rivals, was down by 0.22 per cent.
The euro jumped to a one-month high versus the dollar and gained ground after on reports that ratings firm Moody’s Investors Service held Spain’s rating a notch above junk grade in a long—awaited decision late yesterday.
The New York crude oil was quoting above USD 92 a barrel in Europe on Wednesday.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said,” The rupee had a stronger beginning due to positive global market cues but shaved off the gains towards the last hour while closing stable.”
The premium for the forward dollar ended further weak on sustained receipts by exporters.
The benchmark six-month forward dollar premium payable in March declined to 1461/2-148-1/2 paise from yesterday’s close of 148-150 paise.
The premium for far-forward contracts maturing in September also moved down to 290-1/2-292-1/2 paise from 293-295 paise.
The RBI has fixed the reference rate for the US dollar at 52.7510 and for euro at 69.0385.
The rupee fell back against the pound sterling to end at 85.49 from Tuesday’s close of 85.01 and also turned negative to settle at 69.39 per euro from 68.78.
It remained weak against the Japanese yen to 67.23 per 100 yen from last close of 67.04.