Rupee close flat at 55.64 vs US

The rupee,which closed at 55.65 yesterday,resumed higher at 55.39 a dollar at the Interbank Foreign Exchange market.

In volatile trade,the rupee today touched a fresh one-week high of 55.25 against the dollar but gave up most gains to close flat at 55.64 as exporters sold the American currency in view of strong overseas trends.

The rupee,which closed at 55.65 yesterday,resumed higher at 55.39 a dollar at the Interbank Foreign Exchange Forex market. Thereafter,it touched a high of 55.25 on dollar selling by exporters and initial firmness in local stocks.

The rupee reversed its gains and fell back to the day8217;s low of 55.91,after being hit by heavy dollar demand from importers,mainly oil refiners,on lower oil prices.

It finally closed at 55.64 a dollar after recovering some lost ground.

8220;Today was a normal trading day without any significant movement. However,the currency is showing bias towards weakness,8221; T S Srinivasan,GM Treasury,Indian Overseas Bank said. Going ahead,rupee is likely to trade between Rs 55.25-56 level per dollar in the near-term,he added.

Forex dealers said a strong dollar overseas capped the rupee8217;s rise.

The dollar index,consisting of six major currencies was up by over 0.4 per cent and West Texas Intermediate WTI crude for July delivery was trading above USD 85 a barrel in European market today.

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The euro declined from a one-week high against the dollar after a Spanish government official called for European Union funds to be used to shore up the nation8217;s banks. The euro dropped 0.7 per cent to USD 1.2416 in New York,after rising to USD 1.2542,its strongest level since May 29.

Meanwhile,the stock market benchmark Sensex,which was up by over 150 points intra-day,closed up by 32.24 points at 16,020.64.

As per data from stock market exchanges,FIIs sold stocks worth Rs 681 crore. Analysts said this further added pressureon the rupee today.

Driven by a combination of deteriorating global risk sentiment and weak domestic fundamentals,the rupee hit a record low of 56.52 on May 24.

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According to Pramit Brahmbhatt,CEO,Alpari Financial Services India,the rupee today reversed the initial gains on rise in dollar index that strengthened after weaker-than -expected EU PMI numbers and debt woes weighed on sentiment.

8220;The Euro and GBP were off their highs on risk aversion as the Italian budget minister called in for offshore funds to rescue EU debt and a weak Spanish PMI numbers weighed on the rupee. The demand from oil importers continued at lower levels to met their compulsory payments,8221; he added.

The major market-moving event in the short-term are the elections in Greece June 17,which may decide whether Greece will stay or exit the Eurozone.

The premium for the forward dollar recovered slightly on fresh paying pressure from banks and corporates.

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The benchmark six-month forward dollar premium payable in October edged up to 128-129-1/2 paise from overnight close of 127-129 paise and the far-forward contracts maturing in April also moved up to 246-248 paise from 243-245 paise.

The RBI fixed the reference rate for the US dollar at 55.5615 and for euro at 69.5025.

The rupee remained weak against the pound sterling to end at 85.59 from yesterday8217;s close of 85.51 while recovered to 67.07 per euro from 69.17 previously.

The currency also rebounded against the Japanese yen to 71.03 per 100 yen from last close of 71.27.