Re gains on euro track; but market choppy.

The rupee strengthened on Thursday, mostly tracking the movement of the euro against the dollar globally and the local stock market, dealers said. The partially convertible rupee ended at 46.69/70 per dollar, about 0.6% stronger than its close of 46.98/99 on Wednesday. “The market is very choppy, volatile. No one can take a view on the rupee now. It is only following the euro,” said a dealer at Union Bank of India. The Indian unit moved in a range of 46.47 to 46.70 per dollar during the day.

The recovery in stocks raised expectations of capital inflows while the dollar’s losses against major units also
helped. The greenback fell across the board on Thursday as a rise in share markets on the back of strong US economic data helped to cool extreme risk aversion. The index of the dollar against six major currencies was mostly flat at close of local trade. By 1130 GMT, the euro was at $1.2237, near the day’s high of $1.2326. The single currency has found its footing after sliding as low as $1.2110 on Tuesday, its weakest in more than four years.

On Friday, the rupee is expected to extend its choppy run amid lack of clarity on risk appetite globally and the euro’s movement, and may gyrate in a band of 46.50-46.65, dealers said. “Dealers will stay tight as they will wait to see the non-farm payroll data in the US,” said a foreign bank dealer. One-month offshore non-deliverable forward contracts were quoted at 46.80/90, weaker than the onshore spot rate. In the currency futures market, the most traded near-month dollar-rupee contracts on NSE and MCX-SX both ended at 46.8450, with the total traded volume on the two exchanges at around $6.7 billion.

Source :- economictimes.indiatimes.com