Rupee ends slightly higher; importer dollar demand counters IPO inflows

The Indian rupee ended slightly higher on Wednesday aided by IPO-related inflows but importers' U.S. dollar demand capped gains.

The rupee closed at 83.32 against the U.S. dollar, marginally stronger than its close at 83.3550 in the previous session.

The dollar index ticked up to 103.74 on Wednesday but was hovering close to its lowest level in nearly three months. Asian currencies dropped, with the Indonesian rupiah leading losses down by almost 0.9%.


"We tend to think it is a little too early to expect the dollar bear trend to run a lot further just yet," ING Bank stated in a note.

The rupee rose to a high of 83.26 earlier in the session but shed some of those gains due to dollar demand from importers, a foreign exchange trader at a state-run bank said.

Initial public offerings (IPO) of about $900 million are lined up this week, including that of Tata Technologies, which was oversubscribed within hours after bidding opened on Wednesday.

Two large foreign banks were also seen bidding for dollars, likely on behalf of custodial clients, a second foreign exchange trader at a private bank said.

Despite some positive cues, the rupee is unlikely to gain beyond 83.10 in the near term, said Anindya Banerjee, head of foreign exchange research at Kotak Securities.

Investors now await initial jobless claims data due in the U.S. later in the day.

The data is expected to show that claims rose slightly to 231,000 in the week ended Nov. 18, according to a Reuters poll. Continued cooling in the U.S. labour market could cement bets that the Federal Reserve will not tighten monetary policy further