Rupee softens by 3 paise against dollar.

The Indian rupee today softened by a 3 paise to 46.19/20 against the U.S. dollar in lacklustre trade at the Interbank Foreign Exchange market.

The rupee opened lower at 46.21/22 a dollar against its previous close of 46.16/17 and dropped further to a low of 46.30 during intra-day trade.

However, sustained capital inflows amid late dollar selling by exporters helped the rupee to recover most of its early losses. It touched a high of 46.14 before ending the day slightly lower at 46.19/20.

Forex dealers attributed the early fall in the rupee to good dollar demand from importes and some corporates on the back of a firm dollar overseas.

The dollar was mostly higher in Asia today after American economic data beat the market’s low expectations and triggered some short-coverings, though the overall mood remained bearish. The index of the dollar against six major currencies was 0.1 percent higher.

In New York, the dollar gained against the euro and Japanese yen yesterday after better-than-anticipated data on the private payrolls and services industry dampened worries about the U.S. economy’s growth.

Short-covering of dollar positions ahead of U.S. non-farm payrolls figures due on Friday also weighed on the rupee initially.

The Indian benchmark Sensex ended down by 44.61 points or 0.24 per cent on fag-end selling today.

Meanwhile, food inflation declined to 9.53 per cent for the week ended July 24 from 9.67 per cent in the previous week.

Global crude oil was trading at around $82 a barrel in London today.

The rupee premium for the forward dollar rose further on sustained paying pressure from banks and corporates. The benchmark six-month forward dollar premium payable in January ended higher at 112-1/2-114 paise from 108-1/2-110-1/2 paise on Wednesday and far-forward maturing in July also closed up at 194-196 paise from 189-1/2-191-1/2 paise previously.

The Reserve Bank of India fixed the reference rate for the dollar at Rs. 46.23 and the euro at Rs. 60.80.

In cross-currency trade, the domestic unit firmed up against the pound sterling, the euro and the Japanese yen.

The rupee moved up against the pound sterling to end at Rs. 73.46/48 per pound from Wednesday’s close of Rs. 73.61/63.

It also gained against the euro at Rs. 60.98/61.00 per euro from Rs. 61.05/07 previously.

The domestic currency also rose against the yen to conclude at Rs. 53.63/65 per 100 yen from its last close of Rs. 54.01/03.

Source : .thehindu.com