RTRS: Rupee up on broad dlr fall; oil buying hurts
(Reuters) - The rupee rose on Tuesday, buoyed by broad losses in the dollar versus major currenices, but demand for the U.S. unit from oil firms scrambling to meet month-end import commitments quickly pulled it off its highs.
At 10:15 a.m. (0445 GMT), the partially convertible rupee was at 45.16/17 per dollar, off its high of 45.14 and 0.2 percent stronger than its close of 45.24/25 on Monday.
"Market seems to be thin. Dollar supply is less but there is some month-end demand from the oil side, which had been driving the market yesterday and today as well," Hari Chandramgathan, a senior foreign exchange dealer with Federal Bank, said.
India imports nearly two-thirds of its oil needs and refiners are the largest buyers of dollars in the domestic currency market, with their demand tending to peak at the end of each month when they are required to make payments.
Traders said gains in other regional peers also underpinned rupee sentiment. All Asian currencies were trading stronger compared to the dollar.
The index of the dollar against six major currencies was down 0.6 percent at 79.890 points.
The euro rose sharply as bears were forced to abandon their bets on Tuesday while the dollar came under broad selling pressure, hitting a three-week low against the yen and a seven-week low against the Australian dollar.
Traders said they would also watch the domestic share market performance for cues on the direction of foreign fund flows, which have a large influence on the rupee's fortunes.
Indian shares were choppy ahead of the expiry of derivative contracts on Thursday and on sluggish volumes.
Foreign funds have pulled out a net $558.55 million from Indian equities this month through Friday. They are, however, net investors of $28.4 billion in 2010, on top of the $17.5 billion pumped in last year.
The rupee is up 3 percent so far this year and gained 4.7 percent last year.
One-month offshore non-deliverable forward contracts were quoted at 45.38, weaker than the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, MCX-SX and United Stock Exchange were at 45.17, 45.1725 and 45.1750 respectively, with the total traded volume on the three exchanges at about $650 million.
