The Indian rupee fell on Thursday, snapping two sessions of gains, as euro zone concerns again took centre stage with worries over whether Spain would seek a bailout soon. The rupee's gains from US President's Barrack Obama's re-election were wiped out as global stocks and the euro fell, pulling down the local currency with it. "We believe a lot of positive news has already been priced in and we reduce our bias on short USD/INR into year-end," said Vivek Rajpal, strategist at Nomura in Mumbai.
The investment bank expects the rupee to trade at 53 to the dollar by end-December and advises investors to short USD/INR through options in the near term. The partially convertible rupee closed at 54.36/37 per dollar, 0.3 percent weaker than its previous close of 54.2050/2150. In the offshore non-deliverable forwards segment, the one-month contract was at 54.62 while the three-month was at 55.19. In the currency futures market, the most-traded near-month dollar/rupee contract on the National Stock Exchange and the MCX-SX closed at around 54.55 with a total traded volume of $4.6 billion.