Rupee eases on dollar strength

MUMBAI: The rupee traded weaker on Wednesday afternoon at 47.99 against the dollar at 1 pm, with the dollar gaining ground against most major global currencies. However a upswing in stocks checked losses. Dealers said the dollar rose versus the euro after reports of a good US consumer confidence numbers. The local unit had closed at 47.80 on Tuesday

Dealers say the budget will determine any further direction the local unit takes. Before the budget, the data keenly watched will be Economic Survey on July 2.

The dollar fell for a four straight days against the euro as stocks rose on investor speculation that the global recession is heading to a close, increasing demand for riskier emerging market assets.

"We think there will be a technical rebound towards 48.6 before a new drop. Our pivot point stands at 48.6. An alternative scenario is above 48.6, look for 49.4 and 49.8," said a technical analyst at Alpari India, a London based forex trading brokerage.

Government bonds traded higher amidst speculation that the Centre may not over-shoot its borrowings targets for this year. The central bank said on Tuesday it will buy back debt securities next week. There is no auction of debt securities for this week, as per the RBI calendar of auctions.

The yield on the most traded debt traded at 6.41% at 1 pm as against 6.49% at close on Monday. The ten-year bond only saw trades worth Rs 175 cr.