Rupee ended up for the second week at 46.55

The rupee ended up for the second week at 46.55 from 46.68 against the dollar. Trading was made volatile by sporadic bouts of heavy corporate demand as well as dollar liquidation.

A wave of heavy corporate demand mid-week pulled the rupee down close to 46.80. The rupee bounced back as weak outlook on the dollar instigated profit-taking. Later in the week, the rupee yet again missed breaking the 46.50 barrier, with the dollar having faced fresh selling post-ECB and BoE interest rate hikes.

Forward premia stuck to a range despite wide movement in spot market levels and dip in US yields. Six-month premium ended at 1.04% from 1.1%. The rupee is likely to hold firm against the broadly weak dollar. Crude oil prices pose the risk to the upside.

Credence Analytics India Ltd