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Wednesday February 18, 09:20 AM
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Rupee may weaken to 50/dlr, outflows weigh
MUMBAI (Reuters) - The rupee could weaken to 50 against the dollar on Wednesday for the first time since early December, pressured by outflow concerns from the stock market following weak regional indices.
* Traders will be watching the central bank for any sign of dollar sales to support the rupee, which fell 1.7 percent on Tuesday to 49.67/68 from Monday's close of 48.84/85.
* One-month offshore non-deliverable forwards were quoting at 50/50.1, pointing to a weaker start.
* Japan's Nikkei stock index fell 1.2 percent by 0254 GMT to a nearly three-month low, while Hong Kong's Hang Seng was down 1.6 percent. Nifty (^NSEI : 4941.75 -63.8
) stock futures were trading down 1.3 percent, indicating a lower opening in India.
* The euro hit a fresh 2-½ month low against the dollar on Wednesday after warnings from ratings agencies fuelled fear that a deep recession in Eastern Europe would cause more damage to European banks.
* India's central bank sold $318 million in intervention in December, sharply lower than $3.1 billion it sold in November, as the rupee pulled back from a slide, the central bank's bulletin showed.
