Indian rupee falls as Fed view boosts dollar
MUMBAI, April 4 (Reuters) - The Indian rupee fell on Wednesday weighed by gains in the dollar after expectations of fresh monetary stimulus in the United States faded and local oil importers looked to cover payment obligations before the long weekend.
A fall in local stocks also added to the selling pressure on the rupee, traders said.
Global stocks and the euro fell after the U.S. Federal Reserve dimmed hopes for fresh asset-buying, further underlining its divergence with an embattled Europe that faces recession and remains firmly in crisis-fighting mode.
The rupee ended at 51.055/065 to the dollar, 0.71 p ercent down from Tuesday's close of 50.6950/7050.
Indian financial markets are closed on Thursday and Friday for local holidays.
"We have seen the rupee pull back from near 50.50 which was a strong resistance level for it. Now, the next support for rupee is around 51.35 and then 51.55," A. Ajith Kumar, senior manager of forex trading at Federal Bank.
"Outlook on the rupee is bearish due to weak domestic fundamentals like a widening current account deficit and high global oil prices."
India's balance of payments fell into negative territory in the December quarter for the first time in three years, data released last week showed.
"I think any weakness for rupee is likely to be limited around 51.40 because the central bank may step into the market after this," said a senior foreign currency trader with a private bank.
The Reserve Bank of India has been actively intervening in the local currency market to support the rupee which fell to its record low of 54.30 last December and notched up losses of more than 12 percent in the just concluded fiscal year 2011/12.
The one-month offshore non-deliverable forward contracts were at 51.48.
In the currency futures market, the most-traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and on the United Stock Exchange all ended around 51.4, on a combined volume of $4.3 billion. (Editing by Subhadip Sircar
ASHRAF HUSSAIN
PGDM-2nd Semester
A fall in local stocks also added to the selling pressure on the rupee, traders said.
Global stocks and the euro fell after the U.S. Federal Reserve dimmed hopes for fresh asset-buying, further underlining its divergence with an embattled Europe that faces recession and remains firmly in crisis-fighting mode.
The rupee ended at 51.055/065 to the dollar, 0.71 p ercent down from Tuesday's close of 50.6950/7050.
Indian financial markets are closed on Thursday and Friday for local holidays.
"We have seen the rupee pull back from near 50.50 which was a strong resistance level for it. Now, the next support for rupee is around 51.35 and then 51.55," A. Ajith Kumar, senior manager of forex trading at Federal Bank.
"Outlook on the rupee is bearish due to weak domestic fundamentals like a widening current account deficit and high global oil prices."
India's balance of payments fell into negative territory in the December quarter for the first time in three years, data released last week showed.
"I think any weakness for rupee is likely to be limited around 51.40 because the central bank may step into the market after this," said a senior foreign currency trader with a private bank.
The Reserve Bank of India has been actively intervening in the local currency market to support the rupee which fell to its record low of 54.30 last December and notched up losses of more than 12 percent in the just concluded fiscal year 2011/12.
The one-month offshore non-deliverable forward contracts were at 51.48.
In the currency futures market, the most-traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and on the United Stock Exchange all ended around 51.4, on a combined volume of $4.3 billion. (Editing by Subhadip Sircar
ASHRAF HUSSAIN
PGDM-2nd Semester
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