The rupee today erased early losses and closed five paise higher at 55.62 on fag end dollar selling by exporters and continued capital inflows.
At the Interbank Foreign Exchange (Forex) market,the rupee in the morning resumed slightly lower at 55.69 a dollar from overnight close of 55.67. It later declined further to a day’s low of 55.75 on sluggish local stocks amid some month-end dollar demand from importers.
However,late dollar selling by exporters amid persistent foreign fund inflows in equities worth Rs 140 crore helped the rupee recover its initial losses.
The rupee later touched a high of 55.56 before concluding at 55.62,a gain of five paise over yesterday’s closing.
Traders said the rupee also drew some comfort from euro’s strength which held near recent highs against dollar riding on hopes that European Central Bank (ECB) will take steps to tackle the debt crisis.
Investors were also wary of the dollar in the run-up to a meeting of US central bankers at Jackson Hole,Wyoming. The euro was last trading flat at USD 1.255 ahead of the leaders of Germany and Italy meeting today to discuss the Euro crisis.
“The rupee was again seen in a narrow range before the GDP data and Fed meeting on Friday. The GDP growth figures are expected on lower side on account of no recovery in industrial and manufacturing sectors. We expect the market to be stable before the ECB meet on September 6,” said Abhishek Goenka,Founder & CEO,India Forex Advisors.
Meanwhile,the Indian stock market benchmark Sensex today dipped by 140.90 points or 0.80 per cent,extending losses for the fourth session in a row.
Pramit Brahmbhatt,CEO,Alpari Financial Services (India) said,”The rupee witnessed a listless but volatile trade divided between the global and local cues.”
The premium for the forward dollar ended slightly higher on sustained payment pressure from banks and corporates.
The benchmark six-month forward dollar premium payable in January edged up to 165-167 paise from Tuesday’s close of 164-166 paise.
The premium for far-forward contracts maturing in July also advanced further to 323-325 paise from 321-323 paise.
The RBI has fixed the reference rate for the US dollar at 55.6653 and for euro at 69.9158.
The rupee fell back against the pound sterling to 88.04 from yesterday’s close of 87.92 while recovered against the euro to 69.76 from 69.84.
It also moved up against the Japanese yen to 70.75 per 100 yen from last close of 70.80.