* Rupee ends at 55.07/08 per dlr vs 54.49/50 Thurs close
* Combined dlr demand from oil, defence, corporates hurts
* INR may depreciate further from current levels-trader
By Swati Bhat
MUMBAI, Jan 4 (Reuters) - The Indian rupee weakened for a
second session on Friday on the back of dollar demand from oil
and defence firms as well as other companies while the global
risk-off mood also prompted short-covering of dollar positions.
Broad optimism seen over the U.S. "fiscal cliff" deal at the
start of 2013 began to fade after Federal Reserve officials
raised concerns about possible side effects of the stimulus
progamme, dragging global shares lower.
The tepid weekly performance in the rupee comes after data
on Monday showed the current account deficit widened to a record
high in the July-September quarter, reviving worries about
India's twin deficits and potentially constraining the rupee's
"I expect the rupee to depreciate further from here. We may
see 55.40-45 levels next week. We have to watch the flows into
the stock market after new year hoildays. Until then rupee can
trade lower," said Hari Chandramgethen, head of forex trading at
South Indian Bank, predicting a range of 54.70-55.50 next week.
The partially convertible rupee closed at 55.07/08
per dollar, 1.05 percent weaker compared to its close of
54.49/50 on Thursday. The unit closed down 0.15 percent on the
Traders said sharp gains in the dollar versus major
currencies triggered some short-covering while there was also a
corporate outflow of $50 million, which added to the selling
pressure on the rupee.
The dollar index against six major currencies was
trading up 0.56 percent when the local market closed.
The weaker rupee this week comes despite a solid performance
in domestic shares, with indexes posting their biggest weekly
gains since the week ended on Nov. 30, while bonds rallied on
expectations of interest rate cuts this month.
In the offshore non-deliverable forwards, the
one-month contract was at 55.39 while the 3-month was at 55.96.
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
around 55.33 with a total traded volume of $5.3 billion.
(Editing by Sunil Nair)