Rupee edges 10 paise lower vs Dollar; logs 4th straight weekly loss

MUMBAI: In tandem with weaker equities, the rupee today closed 10 paise lower at 60.18 against the US dollar driven by higher oil-related demand for the American currency, extending its string of weekly losses to four.

The rupee resumed lower at 60.22 per dollar as against the last closing level of 60.08 at the Interbank Foreign Exchange ( Forex) Market. It hovered in a range of 60.14 per dollar and 60.34 per dollar during the day, before ending at 60.18 per dollar, showing a loss of 10 paise or 0.17 per cent.

The local unit has lost 41 paise this week. It had lost 60 paise, 6 paise and 59 paise in the three preceding weeks.

Banks and importers today preferred to increase their dollar position due to rise in crude oil due to ongoing violence in Iraq, say forex dealers.

The dollar index, a gauge of six major global rivals, was up by 0.11 per cent.

"Rupee was seen trading weak during the session taking cues from the soaring global crude prices as crisis in Iraq continued. Domestic currency was seen leading the losses along with Indonesia's Rupiah reflecting the threat that increased crude poses to both countries' current account balances and inflation rates," said Abhishek Goenka, Founder & CEO, India Forex Advisors.

In the international market, crude oil prices retained support near a nine-month peak as dealers track the unfolding conflict in Iraq fearing it could cause supply disruption.

Brent crude for August eased 15 cents to $114.91 in mid-morning trade, after rallying to $115.06 in London, its highest since early September.

In London, the dollar was under pressure in the early trade today, heading for its biggest weekly loss in over two months against a basket of currencies following the Federal Reserve's surprisingly dovish policy outlook.

Meanwhile, the Indian benchmark Sensex moved down by 96.29 points, of 0.38 per cent, to end at 25,105.51.

"Slight increase in the crude price during the early trade may be the reason for slight depreciation of rupee due to higher dollar demand by oil companies. Throughout the day, rupee traded in a narrow range," said Kiran Kumar Kavikondala, Director & CEO, WealthRays Securities.

The premium for forward dollar closed steady to firm on stray receipts by exporters.

The benchmark six-month premium payable in November closed at its overnight level of 223-225 paise.

However, far-forward contracts maturing in May, 2015 gained to 469-471 paise as compared to 466.5-468.5 paise yesterday.

The Reserve Bank of India fixed the reference rate for dollar at 60.2785 and for the euro at 82.1200.

The rupee fell back sharply against the pound to 102.52 from yesterday's close of 102.32 and firmed up further to end at 81.75 per euro from 81.88.

It also strengthened to 58.97 per 100 Japanese yen from 59.01.