MUMBAI (Reuters) - The rupee weakened on Friday snapping a five-day winning streak on the back of the dollar's rise versus major units and weaker domestic shares.
At 11:12 a.m. (0542 GMT), the partially convertible rupee was at 46.42/43 per dollar, weaker than its previous close of 46.34/35. On Thursday, the rupee had risen as high as 46.22, its strongest since Sept. 26, 2009.
"Rupee has dropped tracking the dollar's rise and even shares have turned negative despite better Infosys results. The dollar's moves versus the euro will be key in the determining the direction for the rupee," a dealer with a foreign bank said.
The U.S. dollar rose on Friday, with comments from Reserve Chairman Ben Bernanke that indicated monetary policy might have to be tightened as a recovery takes hold, helping to pull the greenback off 14-month lows against a basket of currencies.
The dollar index, a gauge of the U.S. unit's performance versus six majors, was up 0.4 percent.
Infosys Technologies Ltd beat street expectations with a 7.5 percent rise in quarterly profit and raised its full year forecast as demand for outsourcing grows and pricing pressure eases.
The main share index was choppy in early trade, failing to provide any clear direction to the rupee.
Dealers said the arbitrage gap between the onshore spot and non-deliverable forwards (NDF) had narrowed, however, some banks continued to exploit the opportunity. Banks buy dollars in the NDFs where they are cheaper and sell in the spot market to profit the difference.
One-month offshore NDF was quoted at 46.35/45, marginally stronger than the onshore spot rate. One-month implied volatility in the rupee was trading at 9.25/11.25 percent, after having touched a one-month high of 10.40 percent earlier.
