Rupee down by 2 paise on fag-end dollar demand

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Mumbai: Paring all its initial gains, the rupee on Tuesday closed lower by 2 paise at 44.74/75 against the US currency due to fag-end dollar demand from banks and importers in view of firm trend overseas.

"USD/INR moved in a range of 44.64 and 44.78. Equity markets traded flat and closed just below yesterday`s close," Alpari Forex (India) CEO Pramit Brahmbhatt said.

"Rupee after touching the intra-day high, erased all gains and depreciated as euro continued to weaken. Large dollar inflows towards a state-run firm`s share sale, limited the fall of rupee… levels to watch out for rupee would be 45," he added.

At the Interbank Foreign Exchange, the rupee resumed higher at 44.65/66 per dollar as against the previous closing level of 44.72/73 per dollar and moved up further to 44.62 per dollar on persistent selling of dollar from banks on the back of resumption of foreign capital inflow into equity market.

However, it failed to maintain gains on fresh demand for dollars from banks and importers in view of firm dollar in overseas market and ended lower at 44.74/75 per dollar after moving in a range of 44.62 and 44.80 during the day.

In London, the dollar was slightly higher versus most major rivals, including the euro, which slipped back into negative territory after a brief rebound inspired by reports further aid may be in the works for Greece.

Meanwhile, US crude future was trading above USD 101 a barrel in London today.

The rupee premium for the forward dollar closed steady to eased on fresh receivings by exporters. The benchmark six-month forward dollar premium payable in October closed stable at 145-146 paise.

However, far-forward contracts maturing in April finished slightly lower at 290-292 paise from Monday`s close of 291-293 paise.

The RBI has fixed the reference rate for the dollar at Rs 44.73 and the euro at Rs 63.90.

The rupee improved further against the pound sterling to end at Rs 73.12/14 from yesterday`s close of Rs 73.20/22 and moved up against the euro to close at Rs 64.20/22 from Rs 64.38/40 in the previous session.

It, however, fell back against the Japanese yen to Rs 55.52/54 per 100 yen from last close of Rs 55.39/41.

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