Rupee down 6 paise vs USD at 55.34 in volatile trade

In volatile trade, the rupee on Monday softened by six paise to settle at 55.34 against the US dollar due to demand for the US currency from oil importers.

The rupee commenced higher at 55.25 a dollar at the Interbank Foreign Exchange (Forex) market compared to Friday's close of 55.28. It improved further to day's high of 55.19 on dollar selling by exporters amid sustained capital inflows into the stock market. Weak dollar overseas also boosted the rupee sentiment in early trade, said forex traders.

However, it turned negative in the late morning session on dollar demand from importers amid hesitancy in local shares. Thereafter, rupee touched a low of 55.47 a dollar.

With shares recovering in the fag end and US dollar losing momentum in the international market, the rupee rebounded to settle at 55.34, a drop of six paise over the previous close.

FIIs pumped in nearly Rs 340 crore in stocks today as perprovisional data on stock exchanges.

The euro gained for the first time in five days against the dollar. "The rupee movement was in line with Euro coupled with demand for dollars from importers along with equity market. However, rupee is showing appreciating bias as of now," said Hemal Doshi, Currency Strategist, Geojit Comtrade.

The dollar index was down by about 0.33 per cent against a basket of major global currencies. New York crude oil was trading at around USD 94 a barrel in Europe today over tension between Iran and Israel.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: "It seems that the rupee is discounting tomorrow's WPI."

Meanwhile, the stock market benchmark Sensex which moved in a very narrow breadth till late mid-session, recovered later to close over 75 points up.