Rupee gives up early gains, ends weaker at 47.07/08 a dollar

Mumbai, June 3 (PTI) Moving in tandem with local stocks,
the Indian rupee Wednesday gave up its early gains and ended
six paise weaker at 47.07/08 against the dollar, after it
(dollar) stabilised against a basket of currencies in Asian
markets.

Initially, the rupee hit a seven-month high of 46.75/76
against the dollar as the US currency turned weak in global
markets amid some selling by banks.

The Interbank Foreign Exchange (forex) market continued
to witness active trade, largely influenced by a high level of
volatility in equity markets.

The rupee fluctuated between 46.75 and 47.10 during the
day after resuming stronger at 46.93/95 a dollar over its
previous close of 47.01/02 a dollar.

Forex dealers said negative FII activity in equity also
weighed on rupee sentiment.

Foreign institutional investors were believed to be heavy
sellers in equity markets for two days.

Rupee sentiment, however, was strong on continued
expectations of increased capital inflows during the year
prompted by speedy economic reforms by the new government.

The Indian benchmark Sensex Wednesday ended fractionally
in the red after breaching the 15,000 psychological level for
the first time in nine months.

Meanwhile, the Reserve Bank of India (RBI) fixed the
reference rate for the US dollar at Rs 46.84 and for the euro
at Rs 66.90.

Rupee premiums on the forward dollar ended lower on fresh
receiving from exporters.

The benchmark six-month forward dollar premium payable in
November ended at 68-70 paise, down from 72-1/2-74-1/2 paise
on Tuesday and the far-forwards maturing in May also finished
lower at 116-118 paise from 122-124 paise previously.
In cross-currency trade, the Indian rupee continued to
decline against the pound sterling while firmed up against
the euro and the Japanese yen.

The domestic currency dropped further against the pound
sterling to end at Rs 77.59/61 from the previous closing level
of Rs 77.32/34 while moved up against the the euro to Rs
66.82/84 from Rs 67.05/07 previously.

It also firmed up against the Japanese yen to finish
the day at Rs 49.07/09 per 100 yen as against Rs 49.17/19 per
100 yen previously. PTI RSU