Rupee closes at 63.39 against US dollar

The rupee relinquished initial gains and closed virtually steady at 63.39 against the American currency as dollar demand matched supply from exporters and foreign funds.

Greenback's distinctly weak trend overseas alongwith firms local equity markets even failed to lift the rupee sentiment, a forex trader commented.

The domestic unit opened firmly higher at 63.32 compared to Thursday's closing level of 63.39 at the Interbank Foreign Exchange (FOREX) market on the back of steady dollar selling and also supported by a recovery in domestic equity market.

However, the local currency turned extremely weak and drifted back to hit a fresh intra-day low of 63.4750 following some fresh dollar demand and short covering.

It staged a smart rebound from its low towards the fag-end trade on dollar selling as well as suspected intrusion by the Reserve Bank of India (RBI) to end steady at 63.39.

In overseas trade, the dollar was trading subdued against other major currencies on rising hopes for a deal between Greece and its creditors as well as easing volatility in equities worldwide.

The US dollar index was up by 0.95 per cent at 95.75.

Meanwhile, the benchmark BSE Sensex rebounded by 87.74 points to finish at 27,661.40.

Foreign portfolio investors (FPIs) sold shares worth Rs 254.10 crore on Thursday, as per provisional data.

Veracity Group CEO Pramit Brahmbhatt said the rupee traded range bound and ended near Thursday's close at 63.39 for the day.

Investors preferred to stay away from the currency market and did not support the Rupee movement even after the positive closing of local equities and weak dollar.

The trading range for the spot USD/INR pair is expected to be within 63.00 to 63.80.

In the forward market, the premium for dollar dropped owing to continued receipts by exporters.

The benchmark six-month premium payable in December moved down to 210-212 paise against 211.5-213.5 paise previously. However, far-forward contracts maturing in June 2016 held steady at 433-435 paise.

The RBI fixed the reference rate for the dollar at 63.3793 and for the euro at 70.4334.

The rupee retreated against the pound sterling to end at 98.48 from 97.58 and also fell back against euro to settle at 70.91 as compared to 70.06 on Thursday.

However, it strengthened against the Japanese currency to end at 51.84 per 100 yen as compared to 52.16.