MUMBAI (Reuters) - The rupee weakened to new three-week lows on Wednesday as a lower opening in the stock market raised worries of foreigners repatriating funds while weaker Asian units added to the woes. At 10:10 a.m. (0440 GMT) the partially convertible rupee was at 47.16/17, its weakest since Oct. 6 and 0.6 percent weaker than its previous close of 46.88/90. "The rupee has depreciated tracking the dollar index and global equity markets, even Asian units are weaker," the chief dealer with a large private sector bank said. "In the medium term, may be over the next quarter, we will see the rupee under pressure, even equity markets seem due for a correction, so we could test levels like 47.80 or even 48, but in the last quarter of this year, we should be back in the 45-46 range," he said. The MSCI index of Asian stocks ex-Japan was down 2 percent. Local shares dropped 0.8 percent early, mirroring the losses in global markets, which dropped as weaker-than-expected U.S. consumer confidence data deepened concerns over the strength of economic recovery. Foreign fund investments in local shares have reached a net $14.1 billion so far in 2009 and have been a key factor fuelling the rise in both the equity market and the rupee. Last year, foreigners had pulled out a net over $13 billion. Most Asian currencies were lower compared to the dollar. Gains in the dollar versus major units was also expected to hurt the rupee. The dollar held gains against a basket of currencies on Wednesday while the yen rose as investors trimmed stretched pro-risk positions in higher yielding currencies as stocks fell on weaker-than-expected U.S. data.

Source