The rupee recovered modestly by 4 paise on Wednesday to close at 44.47/48 against the U.S. currency on mild dollar selling by exporters despite weak local equities, amid capital outflows.
“Indian equities continued to fall and closed down by half a per cent, which depreciated rupee, but in later session rupee got some strength and traded near to its previous closing as the dollar lost against major currencies,” Alpari (Forex) India CEO Pramit Brahmbhatt said.
The levels to watch out for rupee would be 45. The trading range for the USD/INR will be between 44.50—45.00,” he added.
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At the Interbank Foreign Exchange (Forex) market, the local currency opened lower at 44.60/61 a dollar from previous close of 44.51/52 and immediately touched a low of 44.62 in line with sluggish equities.
However, dollar selling by exporters in the later part of the day helped the rupee to recover from the day’s low to a high of 44.46 before concluding at 44.47/48.
Forex dealers attributed the initial fall in the rupee to weakness in stocks as well as capital outflows.
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The U.S. dollar edged higher in New York market yesterday after trading in a tight range against major currencies, showing strength against the pound, but slipping versus the euro ahead of monetary policy decision from the European Central Bank.
However, the dollar index was trading slightly lower by 0.03 per cent against a basket of currencies in the European market, while New York crude oil was trading below USD 111 a barrel today.
The rupee premium for the forward dollar closed stable.
The benchmark six-month forward dollar premium payable in October finished at 158—159—1/2 paise from 158-160 paise on Tuesday, while far-forward contracts maturing in April ended steady at its overnight closing level of 317-319 paise.
The RBI has fixed the reference rate for the dollar at Rs. 44.59 and the euro at Rs. 66.04.
The rupee fell back against the pound sterling to end at Rs.73.46/48 from Tuesday’s close of Rs. 73.38/40 and declined further against the euro to Rs. 66.05/07 from Rs. 65.82/84 yesterday.
It, however, bounced back against the Japanese yen to Rs. 54.85/87 per 100 yen from last close of Rs.55.11/13.