RTRS:Rupee weakens tailing euro; dlr inflows limit fall
(Reuters) - The rupee edged lower on Monday, dragged by the euro's losses against the dollar and weakness in most Asian currencies, but traders said dollar inflows tempered the fall.
At 11:01 a.m. (00531 GMT), the partially convertible rupee was at 44.5600/5625, 0.07 percent weaker than its 44.5325/5425 close last Friday.
"Market is largely directionless because equities is wobbly and the euro is likely to see some more weakness. So before the (central bank's) policy (review) next week, we could see only some light trading," said a senior foreign exchange dealer at a private-sector bank.
The Reserve Bank of India has raised rates 10 times since March 2010, ranking it among the most aggressive central bank in the world, and is expected to raise rates again by 25 basis points at its quarterly review on July 26.
Most traders expect the rupee to move in a 44.50-44.75 range until then. It has stayed in a band of 44.5375 to 44.6000 so far this session.
The euro was at $1.4075 versus $1.4151 at the close of local forex market on Friday, while the index of the dollar against six major currencies was up 0.37 percent at 75.405 points, compared with its 75.195 points previous close.
The euro and the dollar both struck record lows against the Swiss franc in Asia on Monday while gold reached new highs as investors sought safety from debt problems plaguing the European Union and the United States.
Most Asian currencies were weaker against the dollar.
The local benchmark share index was up 0.24 percent in flip-flop trade.
The one-month onshore forward premium was at 25 points from 26 points on Friday, while the three-month was at 70 points from 70.25 and the one-year was at 229 points versus 229.50.
One-month offshore non-deliverable forward contracts were quoted at 44.73, weaker than the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange were all at 44.6300, with the total volume was at $2.12 billion.
(Reporting by Aditya Phatak; editing by Malini Menon)
