Mumbai: Bucking the trend in stocks, the Indian rupee today washed out initial gains and logged its first drop in four sessions to end at 59.20 against the dollar on late demand for the American currency from importers.
At the Interbank Foreign Exchange (Forex) market, the rupee commenced higher at 59.10 a dollar from its previous close of 59.17. It later improved further to a high of 58.98 on bullish local equities.
However, the rupee met with strong resistance and dropped to a low of 59.23 on late dollar demand from importers before closing at 59.20, showing a fall of 3 paise or 0.05 per cent.
In the previous three sessions, it went up by a total 21 paise in thin trade.
“We now look for USD-INR to be at 60 by year-end 2014 (from 62), although FX policy is likely to impede INR strength . The new government’s strong mandate has given rise to optimism for reforms that could unlock economic potential,” wrote Paul Mackel, Head of Asian FX Research, HSBC.
The dollar index was up by 0.14 per cent against a basket of six major global rivals. Traders said this put further pressure on the rupee.
Pramit Brahmbhatt, Veracity Group CEO said: “Not much movement was seen in currency market as some of the major countries markets were closed. On the occasion of queens birthday, Australian banks were on bank holiday whereas European countries and Switzerland were also closed. In the absence of major economic data, rupee ended near previous close. The trading range for the Spot USD/INR pair is expected to be within 58.80 to 59.80.”
Continuing its record breaching spree, the Indian equity benchmark S&P BSE Sensex today shot up by 183.75 points to end at new peak while FIIs injected Rs 1,283.04 crore last Friday, as per provisional data with stock exchanges.