The Indian rupee gave up early gains to retreat from a recent 9-year high on Tuesday, driven lower by strong dollar demand from oil refiners who found levels attractive, traders said. Investors also unwound short positions in the dollar, on expectations the rupee's rally would not extend much further.
The partially convertible rupee ended at 40.9550/9700 per dollar, slipping from Monday's close of 40.8750/8850. The rupee touched 40.53 early last week, its strongest since May 1998, according to Reuters data. "It was oil, oil, and more oil that moved the market today," said a dealer with a private bank. "It trumped everything."
Traders were also circumspect about building large positions in the local unit on fears of provoking intervention by the Reserve Bank of India (RBI), which is frequently seen selling rupees to smooth volatility and maintain export competitiveness.
Comments
Comments are closed.