The currency fell to a one month low on Friday on concerns that the trade deficit would widen from a 10-month high after violence in Iraq fuelled a surge in global crude prices.
“On Friday, there was dollar demand from corporates as well as oil marketing companies due to which, the rupee weakened. This week the rupee may trade in the range of 59.50-60.25 a dollar,” said Sandeep Gonsalves, forex consultant and dealer, Mecklai & Mecklai.
Gonsalves said the bias is towards the weakening of the rupee. The rupee ended at 59.78 on Friday, compared with the previous close of 59.26. It had ended at 60.05 on May 12.
However, according to currency dealers, any sharp movement in the rupee might result in the Reserve Bank of India (RBI) intervening in the foreign exchange market. Latest RBI data shows that foreign exchange reserves rose by $203.2 million to $312.59 billion in the week ending June 9.
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