BS: Rupee at near 7-week peak as companies sell dollars
The rupee strengthened to its highest level in nearly seven weeks on Friday as some corporates sold dollars, with broad losses in the US unit versus majors and other Asian currencies also boosting sentiment.
At 10:40 am, the partially convertible rupee was at 46.05/06 per dollar, after hitting 46.0150, its highest since June 22 and 0.3 per cent stronger compared with Thursday's close of 46.18/19.
"Dollar weakness is getting reflected in the rupee. There are some flows in the market, adding to the pressure on the rupee to gain, but bids from oil and gold importers are keeping the rupee off its highs," said Vikas Chittiprolu, a senior foreign exchange dealer with state-run Andhra Bank.
He predicts the rupee could trade in a range of 46.00-46.25.
Stocks will be watched for direction during the day. Indian shares were choppy in early trade taking cues from mixed Asian markets, as an unexpected rise in US weekly claims for jobless benefits raised concerns that Friday's payroll data could paint a bleak picture of the US economic recovery.
Foreign fund inflows in 2010 have reached nearly $11 billion helping the rupee gain 1 per cent. Last year, record inflows of $17.5 billion had pushed the rupee up 4.7 per cent.
"The rupee should initially hold in a range of 46.00-46.15, but if we break 46, then 45.85 is immediately possible," a senior dealer with a private bank said.
The dollar was on the defensive near a 3-1/2-month low against a basket of currencies after a rise in US jobless claims figures.
Most Asian currencies also rose against the dollar.
The index of the dollar against six majors was little changed and would be watched for cues.
"Sell dollars around 46.15 levels with a stop-loss at 46.20 and target 45.92 is the trade recommendation for today as we have the U.S. non-farm payrolls in the evening," a dealer with a private bank said.
"I feel exporters are missing this move in the dollar/rupee as there are hardly any sellers."
One-month offshore non-deliverable forward contracts were quoted at 46.20, weaker than the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were at 46.1950 and 46.1925 respectively, with the total traded volume on the two exchanges at about $1 billion.
