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Rupee finally ends with mild gains

Last updated on: June 25, 2013 18:11 IST

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Erasing its initial losses, rupee on Tuesday closed two paise higher at 59.66 against the dollar on some strength in local equities and selling of the US currency by exporters.

A weak dollar overseas also helped the rupee to land in positive terrain at the end while FII outflows of about Rs 1,285 crore (Rs 12.85 billion) capped the rise, forex traders said.

At the Interbank Foreign Exchange market, the domestic unit resumed better at 59.64 a dollar from overnight close of 59.68, also its all-time closing low.

The rupee moved in a range of 59.45 and 59.79 before settling the day at 59.66, showing a rise of two paise.

ins and was being quoted lower at 59.72 a dollar at 1045 hours.

It moved in a range of 59.60-59.76 during the morning deals. In the global market, the dollar gained against the euro in their early trade, with a rise on the yield of the benchmark US Treasury note strengthening the US currency's appeal.

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Treasury managers said talks of RBI trying to defend the rupee whenever it approaches 60-levels helped the local currency on Tuesday.

On Monday, it had fallen by 41 paise or 0.69 per cent.

The Indian benchmark S&P BSE Sensex on Tuesday closed up by 88.26 points in choppy trade.

The dollar index was down by 0.15 per cent against its major global rivals.

"The rupee was seen erasing its earlier losses against the US dollar and started posting gains as domestic stock markets started recovering.

Majority of the Asian currencies were seen trading on a positive note against the US dollar, which further supported rupee to post gains," said Abhishek Goenka, Founder and CEO, India Forex Advisors.

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Image: A Kashmiri woman walks under a garland made of rupee notes on display at a market in Srinagar.
Photographs: Fayaz Kabli/Reuters

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Technically, the USD/INR pair was seen taking support at 59.45 levels, he added.

Globally, it was a mixed session for the Asian markets with some currencies trying to rally early in the session on hopes that a PBOC new conference would allay investor fears of a liquidity crunch in the Chinese markets.

The correction in the dollar rally could accelerate if the US data disappoints the market, said forex experts.

In order to arrest rupee depreciation, Reserve Bank has a capacity to sell up to $30 billion from the forex reserves, foreign brokerage Bank of America Merill Lynch has said.


Image: A jeweller displays silver plates in the form of Indian rupee notes in Chandigarh.
Photographs: Ajay Verma/Reuters

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