Rupee snaps 5 days of gains, down 3 paise against dollar

Snapping a five-session winning streak, the rupee today depreciated by three paise to close at 44.20/21 against the US currency on weakness in local equities amid dollar demand from importers.

Dealers said that renewed demand for dollars from importers and some banks in view of a firm dollar overseas mainly affected the rupee value, they said.

However, sustained capital inflows capped the fall in the rupee value. Foreign Institutional Investors (FIIs) bought shares worth nearly $2.68 billion since March 22, they added.

The Bombay Stock Exchange benchmark Sensex today closed down by over 21 points or 0.11%.

US crude oil was trading below $109 a barrel in London today.

Alpari Forex (India) CEO Pramit Brahmbhatt said, "We expect the rupee to become stronger in the days to come on heavy capital inflows and the trading range for the USD/INR will be between 43.95- 44.45 tomorrow."

At the Interbank Foreign Exchange (Forex) market, the local unit opened steady at its overnight closing level of 44.17/18 a dollar.

It later moved in a range of 44.0950 and 44.28 before concluding at 44.20/21.

Firm dollar overseas too weighed on the rupee as the dollar index, gauging of six major currencies, was up by 0.07% in European market today as euro-zone sovereign-debt woes offset an expectations of higher interest rates.

The rupee premium for the forward dollar declined on fresh receivings by exporters. The benchmark six-month forward dollar premium payable in September settled down at 146-148 paise from 151-153-1/2 paise on Wednesday.

Far-forward contracts maturing in March also ended lower at 289-291 paise from 295-297 paise previously.

The Reserve Bank of India has fixed the reference rate for the dollar at Rs44.22 and the euro at Rs63.23.

The rupee fell back against the pound sterling to end at Rs72.00/02 from Wednesday's close of Rs71.97/99 while held stable at its previous closing level of Rs63.13/15 against the euro.

It, however, inched up against the Japanese yen to Rs51.90/92 per 100 yen from last close of Rs51.89/91.