The Indian rupee closed off lows after the dollar weakened against the euro, but the sharp fall in local equities prevented the unit from ending stronger. The rupee is, however, seen gaining next week as foreign inflows have not slowed as sharply as was expected with the year-end approaching.
"The fundamental story of the rupee is strong despite pressure in the trade account. The trade gap is adequately bridged through excessive flows in the capital account and supply driven mode in forward segment," said J. Moses Harding, global markets head at IndusInd Bank.
The partially convertible rupee ended at 45.29/30 per dollar after falling to 45.37 earlier in the day, and weaker than Thursday's close of 45.22/23, when it had touched 45.58 - its lowest since September 24. One-month offshore non-deliverable forward contracts were quoted at 45.60 to a dollar, weaker than the onshore spot rate, suggesting a bearish near-term outlook.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, MCX-SX and United Stock Exchange closed at 45.3575, 45.3550 and 45.3600, respectively, with the total traded volume on the three exchanges at a moderate $6.6 billion.