The rupee today snapped its last two days of gains against the American currency and ended marginally down by one paise at 53.81 per dollar on fresh dollar demand from importers amidst firm dollar in overseas market.
The rupee resumed higher at 53.69 per dollar against the previous close of 53.80 per dollar at the Interbank Foreign Exchange (Forex) Market and firmed up further to a high of 53.67 per dollar on selling of dollar by banks and exporters on the back of sustained capital inflows from foreign funds.
However,it declined afterward to 53.95 per dollar before finishing at 53.81 per dollar from its last close of 53.80 per dollar,showing a marginally loss of one paise on fresh dollar demand on the back of higher dollar in overses market. It had gained by 57 paise,or 1.04 per cent,in previous two days.
In Los Angeles,the euro slipped in the early trade today ahead of a widely-expected decision by the European Central Bank to cut its key interest rate on the back of weak economic data.
Pramit Brahmbhatt,CEO,Alpari Financial Services (India) said rupee traded weak for the day,taking cues from global markets where dollar traded strong against the major currencies. Indian equity markets traded strong throughout the day and closed up by over one per cent which capped the dollar gain.
Meanwhile,the Indian benchmark Sensex firmed up further by 232 points,or 1.19 per cent,to end at 19,735.77.
“The rupee was seen erasing its earlier gains and it depreciated towards the level of 53.95. Downbeat manufacturing data and slight weakness in the Euro contributed towards the losses in the rupee.
“Today’s ECB’s monetary policy will be very important as rate cut will put pressure on the Euro. Any downside in the
EUR/USD pair will be negative for the rupee. Tomorrow’s RBI monetary policy will be closely watched by the markets where 25 bps rate cut is already priced in,” said Abhishek Goenka Founder and CEO,India Forex Advisors.
Globally,the economic data showed that Manufacturing activity in the euro zone continues to implode with final EZ PMI Manufacturing reading coming in at 46.7 versus 46.5,he said.
The tough economic conditions in the euro zone have put enormous pressure on the ECB to lower rates at today’s meeting. US trade balance and the unemployment claims will be released this evening and will be closely watched by the markets,he added.
The premium for the forward dollar moved down further due to sustained receipts by exporters.
The benchmark six-month forward dollar premium payable in October ended lower 176-177-1/2 paise from Tuesday’s close of 178-1/2-180 paise and far-forward contracts maturing in April also finished down at 338-1/2-340-1/2 paise from 341-343 paise. The RBI fixed the reference rate for the US dollar at 53.7355 and for the euro at 70.7155.
The rupee fell back against pound sterling to 83.75 from Tuesday’s close of 83.27 and also reacted downwards against the euro to 70.80 from 70.34 previously. It too declined against the Japanese yen to 55.30 per 100 yen from last close of 55.17.