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Rupee ends down on weak euro, trading muted

Source : REUTERS
Last Updated: Tue, Mar 26, 2013 12:14 hrs
Cashier counts currency notes inside bank in Lucknow

​The rupee fell on Tuesday, tracking a weaker euro as global markets remain gripped by anxiety about the negative fallout of the Cyprus bailout plan, while volumes were low in the holiday-shortened trading week.

Dealers said few investors were willing to take strong positions given the uncertainty in global markets, with domestic trading closed on Wednesday and Friday for public holidays.

The rupee has weakened 0.9 percent since the 2013-14 budget that largely disappointed investors and after the Reserve Bank of India stuck to a cautious tone on monetary policy on March 19.

Concerns about political instability after the withdrawal of a key ally from the ruling coalition last week have also hurt the rupee, with only one trading session now left before the end of the fiscal year.

"The market is trying to stay squared ahead of the financial year-end on Thursday," said Subramanian Sharma, director at Greenback Forex.

"People are in a holiday mood, and no fresh positions are being initiated. Action will only be seen next year."

The partially convertible rupee closed at 54.365/375 per dollar versus 54.175/185 on Monday, after moving in a narrow 54.25 to 54.41 band.

Falls tracked weaker global risk sentiment. The euro struggled near four-month lows against the dollar on Tuesday On worries Cyprus' bailout plan would serve as a template for other euro zone economies.

A dealer with a state-run bank said the rupee is expected to close the current fiscal year in a 54.20 to 54.50 range.

In the offshore non-deliverable forwards, the one-month contract was at 54.75 while the three-month was at 55.36.

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 closed at around 54.70 with a total traded volume of $3.4 billion.


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