Snapping a two-day gaining streak, the Indian rupee fell by 11 paise to 46.77/78 against the US dollar today on slight dollar buying by banks and importers.

At the Interbank Foreign Exchange, the domestic unit opened stable at 46.65/67 per dollar against last weekend’s close of 46.66/67 per dollar, but improved to touch a high of 46.61 in late morning deals.

Forex dealers attributed the initial rise in the rupee to the smart rally in equities, where the Nifty index of the NSE hit a 29-month high, while the BSE benchmark Sensex touched a three-month high in late morning deals.

The Sensex ended up by 103.66 points, or 0.58 per cent, at 17,937.20 after crossing 18,000 mark. Foreign funds have pumped in nearly USD 361 million in the current month till July 8.

However, some dollar buying by banks and importers in the later part of the day weighed on the rupee. A stronger dollar overseas, too, put pressure on the rupee.

The rupee later dropped to a low of 46.79 before ending the day at 46.77/78 a dollar.

The rupee premium for the forward dollar ended slightly lower on fresh receiving by exporters.

The benchmark six-month forward dollar premium payable in December eased to 84-1/2-86-1/2 paise from 85-1/2-87-1/2 last Friday and far-forward maturing in June also softened to settle at 141-143 paise from 141-1/2-142-1/2 paise previously.

Meanwhile, global crude oil was being traded at around USD 75 a barrel in London today on expectations of healthy corporate earnings in the United States.

Industrial output rose by 11.5 per cent in May, 2010, from the month of April. The April industrial production growth was revised downwards to 16.5 per cent from the provisional figure of 17.6 per cent.

The Reserve Bank of India fixed the reference rate for the dollar at Rs. 46.73 and for the euro at Rs 58.80.

In cross currency trade, the domestic unit rose against the pound and the euro, but declined against the Japanese yen.

The rupee improved against the pound to end at Rs. 70.29/31 per pound from last weekend’s close of Rs. 70.73/75 and also firmed up against the euro to Rs. 58.80/82 from Rs. 59.12/14 previously.

It, however, reacted downwards against the yen to Rs. 52.84/86 per 100 yen from its last close of Rs. 52.68/70.

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