Thursday August 21, 10:46 AM
Rupee edge up on weak dlr but oil watched |
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MUMBAI (Reuters) - The rupee was slightly higher on Thursday as the dollar's weakness against other currencies overseas offset weak local stocks and higher oil prices, but traders were wary about the outlook.
At 10:12 a.m., the partially convertible rupee was at 43.65/66 per dollar, 0.1 percent stronger than 43.70/72 at close on Wednesday. It hit a 17-month low of 43.87 in the previous session.
"Seeing a downside for the dollar-rupee today as the dollar has not performed well against overseas currencies; the euro has strengthened against the dollar," said L. Subramanian, chief dealer with ICICI Bank.
Dealers said they were expecting the Reserve Bank of India to intervene to prevent the rupee from weakening below 43.85, if higher oil price and losses in local shares put downward pressure.
"The rupee might test 43.50 levels today, due to the broad dollar weakness, or it may stay rangebound in the 43.65-43.75 band. Technically resistance is seen at 43.85," Subramanian added.
The dollar edged down on Thursday, slipping from an eight-month high against a basket of currencies as investors booked profits on the U.S. currency's surge this month.
Oil rose to more than $116 per barrel, a third straight day of gains, on supply concerns after Russia expressed its displeasure over a U.S.- Poland defence pact.
Crude oil is India's biggest import and refiners are the largest buyers of dollars in the local currency market. Higher prices mean refiners have to pay more for the oil, which increases dollar demand and weakens the local currency.
Dealers said they were also watching the local stock market to gauge fund flows. Outflows in recent months have weakened a key support for the rupee.
India's main share index opened down 0.2 percent and extended losses in early trade.
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