Rupee reverses early gains,down one paisa at 55.53 Vs USD

The rupee today reversed early gains and ended lower by a mere paisa at 55.53 against the dollar on capital outflows from shares and a stronger American currency overseas.

The rupee commenced higher at 55.44 a dollar from last Friday8217;s close of 55.52 at the Interbank Foreign Exchange Market. Thereafter,it immediately touched a high of 55.41 on early rise in domestic equities amid dollar selling by exporters.

However,the rupee lost momentum and fell back on dollar demand from importers and weakness in local stocks. It touched a low of 55.60 before ending at 55.53,a drop of one paisa over Friday8217;s closing. Last Friday,it had risen by 11 paise or 0.20 per cent.

The dollar index recovered some of the lost ground against its major rivals and was up by 0.03 per cent after Federal Reserve Chairman Ben Bernanke last week hinted at another round of monetary stimulus but offered no details on the timing of any measures.

Pramit Brahmbhatt,CEO,Alpari Financial Services India said,8221; The rupee reversed its intra-day gains towards the fag end of the day8217;s session after a dismal performance by the equity markets due to grim economic outlook and range-bound global markets with some positive bias as the US market is closed today for Labour Day.8221;

The rupee also erased its earlier gains on account on weak manufacturing data from the Eurozone,said Abhishek Goenka,Founder amp; CEO,India Forex Advisors. Earlier in the day,data showed Euro area8217;s manufacturing contracted to 45.10 from 45.3 estimated earlier as per a survey.

Meanwhile,the Indian stock market benchmark Sensex closed lower by 45.16 points or 0.26 per cent while Foreign Institutional Investors FIIs,pulled out funds worth Rs 60 crore from Indian shares today.

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The premium for the forward dollar ended steady. The benchmark six-month forward dollar premium payable in February closed a tad lower at 186-188 paise from last Friday8217;s close of 187-189 paise.

However,the premium for far-forward contracts maturing in August ended at its last closing level of 343-345 paise.

The RBI has fixed the reference rate for the US dollar at 55.4540 and for euro at 69.6955.

The rupee fell back against the pound sterling to 88.20 from last Friday8217;s close of 87.99.

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It also turned negative against the Japanese yen to end at 70.92 per 100 yen from 70.68 while the rupee recovered against the euro to 69.82 from last close of 69.90.