Mumbai: Snapping a two-day declining trend, the rupee today managed to end two paise higher at 60.93 against the greenback after late dollar demand and negative cues from stocks washed out a major part of mid-session gains. Dollar demand from importers and some banks on hopes of further rise in dollar value tracking talk of early interest rate hike by US Fed, mainly led the rupee to veer near its previous closing level of 60.95, a four-week low. At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed better at 60.87 a dollar and immediately touched a low of 60.9450.
Later, it bounced back in mid-session to a high of 60.7050 on dollar selling by exporters, before falling back due to weak local stocks and late dollar demand. It ended at 60.93, revealing a small rise of two paise or 0.03 per cent. In previous two sessions, the rupee had tumbled 66 paise or 1.09 per cent.
An earlier than expected rate hike by US Federal Reserve might force foreign investors to shift their funds from emerging markets, including India.
The benchmark S&P BSE Sensex today declined 61.54 points, or 0.23 per cent, extending losses for the third day. FPIs/FIIs infused USD 35.64 million yesterday, as per provisional data with stock exchanges. The dollar index was up by 0.10 per cent against a basket of six major global currencies.
Pramit Brahmbhatt, Veracity Group CEO said: “Rupee traded firm today, but as the day progressed it lost its way and gave up the gain to end near yesterday's close. Weak local stocks dragged rupee down. Concerns are abound that Fed policymakers could hike interest rates at the coming policy meeting on September 16-17.”
The trading range for the spot rupee is expected to be within 60.50 to 61.50 against the dollar, he added.
Currency markets would now track IIP and inflation data scheduled for Friday release. Globally, developments in the Middle-East and US initial jobless claims will also give cues. In forwards market today, premium remained weak on persistent receipts by exporters.
The benchmark six-month premium payable in February moved down to 234-236 paise from 237.5-239.5 paise previously. Far-forward contracts maturing in August, 2015 also eased to 487-489 paise from 489.5-491.5 paise.
The Reserve Bank of India fixed the reference rate for dollar at 60.9155 and for the euro at 78.6358. The rupee dropped further against the pound to 98.97 from Wednesday's close of 98.31 while recovered to 78.72 per euro from 78.84.
It also rebounded to 56.87 per 100 Japanese yen from 57.15 previously.
