Rupee ends flat in dull trade vs US dollar

but the optimism waned as the day progressed. The euro was mostly flat against the dollar at USD 1.25 after falling to USD 1.2471 yesterday,its lowest since June 12.

The intra-day appreciation in the rupee was short-lived as sustained month-end dollar demand from importers,mainly oil refiners,emerged weighing down rupee,forex dealers said.

The rupee then fell back to a low of 57.20 before recovering some ground to close at 57.02,up just one paisa over its previous closing. FIIs bought Indian stocks worth a meagre Rs 13.03 crore,providing little support to rupee.

Yesterday,after RBI hiked FII limit in government bonds to USD 20 billion,while allowing up to USD 10 bilion from overseas borrowings by India Inc,the rupee witnessed huge fluctuations swinging between 56.38 and 57-levels.

“In contrast,today was a lacklustre show. As there was no visible trigger for the currency to pull back,rupee was range bound. However,there were some talks of RBI intervention when rupee was approaching the day’s low point,” Hemal Doshi,currency strategist,Geojit Comtrade said.

Going ahead,rupee is likely to trade in 56.50-57.50 range versus the dollar in the near-term,he added.

Meanwhile,the Indian stock market benchmark BSE Sensex today closed up by 24.42 points.

Talking about the rupee movement,Pramit Brahmbhatt,CEO,Alpari Financial Services (India) said,” The rupee maintained its weaker tone throughout the day on a volatile dollar index and equity markets. The month end dollar demand continued to weigh on the rupee pushing it towards historical low.”

“The evening session is rocked with some critical economic numbers from US and a positive tone in the data shall further dim the QE3 hopes. A move of the dollar index below the 81.80 levels triggering risk on trades in global markets,” he added.

Abhishek Goenka Founder & CEO,India Forex Advisors feels after the announcement of RBI measures,there might be a slight recovery in the rupee.

“But it will be a short-lived phenomena. The overall trend for the rupee remains bearish. Globally,we see Spain being the next focus of the markets after the Greece elections last week. We expect the rupee to reach the levels of 57.50-57.70 against the dollar within a month,” said Goenka.

The premium for the forward dollar remained firm on sustained paying pressure from banks and corporates.

The benchmark six-month forward dollar premium payable in November finished higher at 159-161 paise from yesterday’s close of 152-154 paise.

The far-forward contracts maturing in May also improved further remarkably to 304-306 paise from 293-295 paise.

The RBI fixed the reference rate for the US dollar at 57.0728 and for euro at 71.4005.

The rupee fell back sharply against the pound sterling to end at 89.09 from yesterday’s close of 88.62 and also turned negative against the euro to 71.20 from 71.15.

However,rupee dropped further against the Japanese yen to 71.87 per 100 yen from last close of 71.42.