The rupee ended at Rs 41.04/06 against the US currency, largely affected by heightened political uncertainty in the country.
MUMBAI: The rupee on Thursday ended at Rs 41.04/06 against the US currency, cheaper by 15 paise from previous close of 40.89/90, largely affected by heightened political uncertainty in the country.
The local currency touched a low of 41.23 in afternoon session after speculation that the Left parties had withdrawn support to the UPA government over the proposed Indo-US civil nuclear deal.
In volatile trade at the Interbank Foreign Exchange (forex) market, Indian unit moved erratically between 40.77 and 41.23 after resuming stronger at Rs 40.80/82 a dollar on an initial strong rally in equity markets, which later gyrated wildly and closed in the red.
Attributing the rupee's dramatic fall from the day's high to rumours of withdrawal of support to the multi-party coalition government, forex dealers said there was fairly good dollar buying by banks in the exchange market in the latter part of the day.
The CPI(M) this afternoon warned the Congress-led Government of withdrawal of support if it went ahead with operationalising the nuclear deal.
The local currency had bounced back by more than two per cent in the last three sessions after touching a four-month low of 41.71 in last week.
The rupee was driven higher on expectations of a fresh capital inflows after indications that the US Federal Reserve may slash interest rates to calm global markets.
Asian indices ended up 1-3 per cent while European markets were up one per cent during opening session on the back of a strong comeback staged by Wall Street last night.
Meanwhile, the Reserve Bank of India (RBI) fixed the reference rate for the US currency at Rs 40.86 per dollar and for the single European unit at Rs 55.38 per euro.
The rupee premium on forward dollar ended slightly lower on fresh receiving by exporters.
The Benchmark six-month forward dollar premiums payable in January ended at 25-1/2 - 27-1/2 paise, down from 28 - 30 paise on Wednesday and the far-forwards maturing in July ended lower at 59 - 61 paise from 61-1/2 - 63-1/2 paise previously.
In cross-currency trades, the rupee reacted downwards against the British Sterling and the Euro while improved further against the Japanese yen.
The rupee eased against the British sterling to end the day at Rs 82.39/41 per pound from previous close of Rs 81.35/37 per pound and dropped against the single European currency to Rs 55.73/75 per euro from last close of Rs 55.20/22 per euro.
It, however, rallied further against the Japanese Yen to finish at Rs 35.14/16 per 100 yen from overnight close of Rs 35.51/53 per 100 yen.
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