Rupee ends marginally higher; CPI watched for cues

Closed at 59.25 per dollar vs 59.27 on Wednesday

<a href = "http://www.shutterstock.com/pic-107807486/stock-photo-image-showing-folded-indian-notes-of-rs.html?src=p5N32CFr8-mqwY5wKad6IA-1-21" target="_blank"> Rupees image </a> via Shutterstock.com
Reuters Mumbai
Last Updated : Jun 12 2014 | 5:51 PM IST
The rupee closed slightly stronger on Thursday, tracking gains in shares but investors largely stayed on the sidelines in the absence of any fresh cues, with the central bank continuing to actively intervene in the market to prevent any volatility.

The Snesex edged higher on Thursday as blue-chips such as HDFC Bank rose on hopes that economic data due later in the day may show easing retail inflation and a pick-up in industrial activity.

The consumer price inflation data for May and the April factory output data is due to be released around 1200 GMT.

Industrial output is expected to rise 1.9% annually in April after falling 0.5% in March, according to the Reuters survey.

"Rupee has been in a tight range and will continue to do so until the central bank is in the market to support the pair. We could see some volatility around the budget," said Paresh Nayar, head of fixed income and foreign exchange at First Rand Bank.

Traders broadly expect the rupee to hold in a 58.80 to 59.60 range until the budget due by mid-July.

The partially convertible rupee closed at 59.25/26 per dollar, little changed from 59.27/28 on Wednesday. The unit moved in a tight range of 59.2375 to 59.3650 during the session.

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Traders will monitor movements in other Asian currencies and shares for opening cues until the budget.

The South Korean won eased on Thursday, but cut some of its losses after the central bank chief said effects from changes in the value of the won were more important than specific levels. Broadly Asian currencies were trading mixed.

In the offshore non-deliverable forwards, the one-month contract was at 59.48 while the three-month was at 60.01.

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First Published: Jun 12 2014 | 5:26 PM IST

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