Rupee down 8 paise at 55.44 on US dollar demand from importers

The rupee commenced on a strong note at 55.26 a dollar against last weekend’s close of 55.36 at the Interbank Foreign Exchange (Forex) market.

Soon after,it touched day’s high of 55.25 in line with initial firmness in domestic equities.

However,the rupee fell back on renewed dollar demand from importers,mainly oil refiners,and also due to a recovery in dollar overseas. It touched a low of 55.50 before concluding at 55.44,a fall of eight paise over Friday’s close.

The dollar index,after falling to its three-month low against the euro last week,was up today by 0.16 per cent against a basket of six major global currencies ahead of the next policy meeting of the US Fed scheduled for this week.

“The rupee started on a positive note against the dollar and closed on a weaker note. The early gains in rupee were mostly attributed to the poor jobs data from the US and corresponding gains in the Euro. During the closing hours,rupee started depreciating against the US dollar on account of dollar demand by the Indian companies,” Abhishek Goenka,Founder and CEO,India Forex Advisors said.

The rupee is expected to be volatile ahead of important events due in the local and international markets.

The global markets are now looking ahead for major events this week in the form of FOMC meet and German’s Constitutional Court ruling,he added.

Meanwhile,the Indian stock market benchmark Sensex in listless but volatile trade ended up by 17.13 points or 0.10 per cent today.

Pramit Brahmbhatt,CEO,Alpari Financial Services (India) said,”The rupee pared initial gains on slight rebound in dollar index and rising oil importers demand. Lacklustre equity markets also weighed on the prices which ended the day on a nearly stable note.”

The global currencies and markets have been awaiting for fresh triggers of QE from FOMC and has taken a breather by being range-bound after the massive run up,he added.

The premium for the forward dollar ended slightly better on stray payment pressure from banks and corporates. The benchmark six-month forward dollar premium payable in February settled a tad higher at 176-1/2-178-1/2 paise from last Friday’s close of 176-178 paise.

The premium for far-forward contracts maturing in August also inched up to 332-1/2-334-1/2 paise from 332-333 paise.

The RBI has fixed the reference rate for the US dollar at 55.3390 and for euro at 70.7425.

The rupee fell back against the pound sterling to 88.62 from last weekend’s close of 88.21 and also turned negative against the Japanese yen to end at 70.80 per 100 yen from 70.12.

The rupee,however,remained weak against the euro to 70.85 from its last close of 70.37.