Bombay:
The rupee recovered from mild losses and closed flat today as exporters likely sold off dollars, dealers said, in a low volume session as term premiums fell for a third straight day.
The rupee finished broadly unchanged at 82.8575 per dollar. It fell to 82.9225 during the session, although it moved in a narrow range of 10 paisa.
The 82.80-82.90 has acted as a strong support zone for the currency over the past two weeks.
There were some monthly outflows associated with futures expiration, but thin trading was largely quiet, one trader said.
The currency likely recovered from the day’s low on dollar sales by exporters, though rupee trading near 83 levels made investors nervous, a state-run bank dealer added.
“At the end of the year there may not be any large speculative positions built up. The real movement in the rupee will probably be seen in the first week of January,” said Mandar Pitale, head of treasury at SBM Bank (India).
Markets will try to gauge the type of portfolio inflows and foreign direct investment. India will be ahead of the budget presentation on February 1, Mandar Pitale added.
USD/INR term premiums fell for the third day, with the 1-year implied yield falling 8 basis points to 2.06%.
The decline, traders said, was due to the interest received in far forwards and the lack of bids from the central bank.
However, premiums were still about 45 basis points above their more than a decade low earlier in December.
Meanwhile, the dollar index held steady at 104,240 after China said Monday it would scrap its COVID-19 quarantine rule for inbound travelers even as COVID cases spike.
Most Asian currencies fell as investors were divided over China’s policy change.
(This story has not been edited by DailyExpertNews staff and is auto-generated from a syndicated feed.)
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