Rupee snaps 2-day gains against dollar; falls 7 paise

The rupee snapped its two-day winning run against the American currency, slipping 7 paise to close at 62.26 on fresh dollar demand from banks and importers coupled with positive global cues.

However, persistent foreign capital inflows into the equity markets restricted the rupee's fall against dollar, a forex dealer said.

The rupee resumed the day lower at 62.22 per dollar against the last closing level of 62.19 at the Interbank Foreign Exchange (Forex) market.

The domestic unit moved in a range of 62.22-62.4050 per dollar during the day before settling at 62.26, registering a loss of 7 paise or 0.11 per cent. The local currency had gained 48 paise or 0.77 per cent in the previous two sessions.

In the Asian market, the US dollar remained mostly flat against other major currencies as market participants anticipate a delay in rate hike by the US Fed following disappointing jobs data on Friday.

The dollar index, a gauge of six major global rivals, was up by 0.77 per cent today.

Oil prices fell in the early Asian trade after Goldman Sachs predicted months of low commodity prices ahead. Meanwhile, the benchmark BSE Sensex inched up by 12.13 points or 0.04 per cent to end at 28,516.59.

Pramit Brahmbhatt, CEO of Veracity Group said: "Rupee traded weak as dollar demand from importers forced the domestic currency to trade lower."

"Investors are being watchful ahead of series of data from the US due this week.

The trading range for the spot USD/INR pair is expected to be within 61.90 to 62.50."

Local equities also traded weak during the day and ended on a flat note which further dented the movement of the rupee, which depreciated 7 paise against the dollar.

In the forward market, premia declined on fresh receiving by exporters.

The benchmark six-month premium payable in September moved down to 235.5-237.5 paise from 237.5-239.5 paise yesterday and forward contracts maturing in March 2016 also declined to 458-460 paise from 460.5-462.5, previously.

The Reserve Bank of India fixed the reference rate for dollar at 62.3321 and for the euro at 68.0791.

The rupee recovered against the pound sterling to 92.80 from 92.95 yesterday and also firmed up against the euro to 67.68 from 68.40 previously. It hardened against the Japanese Yen to 51.91 per 100 yens from 52.26.