MC:Rupee gains in lacklustre trade; share rally helps
The rupee gained in a lacklustre trading session on Monday, aided by hefty gains in domestic shares and the dollar's broad losses against major currencies.
Trading was muted as UK and US markets were closed for a public holiday.
January-March quarter economic growth data due on Friday will be the key trigger for the week, with investors eyeing whether the economy gained any traction after the government's reform measures and the rate cuts by the Reserve Bank of India (RBI).
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Concern over the wide current account deficit has been a key factor pressuring the rupee this year, even as foreign investors have pumped in nearly USD 20 billion into debt and equities so far in 2013.
"Market was dull due to the holidays. There were no specific flows in the market as such. I expect the USD/INR to hold in a 55.40 to 56.00 range during the week," said Vikas Babu Chittiprolu, a senior foreign exchange dealer with Andhra Bank.
"The GDP data will be the next key trigger to watch out for," he added.
The partially convertible rupee closed at 55.5675/5775 per dollar compared to 55.63/64 on Friday. The unit moved in a range of 55.52 to 55.78 during the session with dollar demand from oil firms, weighing on the unit in early trade.
Shares rose more than 1.5 percent to mark their second consecutive session of gains as Reliance Industries Ltd surged after a significant gas discovery, while Sun Pharmaceutical Industries Ltd rose ahead of its quarterly earnings.
Meanwhile, the yen rose on Monday, hovering near its highest in more than two weeks against the dollar, as another drop in Japanese shares continued to encourage investors to unwind dollar hedge positions.
The index of the dollar against six major currencies was down 0.2 percent.
In the offshore non-deliverable forwards, the one-month contract was at 55.93 while the three-month was at 56.48.
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 all closed at 55.61 with a total traded volume of USD 5.15 billion.
