A weakening euro against the dollar had dragged the rupee to a month low last week. Market participants expect the rupee to pare losses if the fall in global commodity prices continues.
Prices of silver fell 30 per cent while crude oil, lead, nickel, and copper fell 7-12 per cent on Friday. This trend is expected to continue.
According to the Clearing Corporation of India (CCIL), the rupee closed at 44.79 against the dollar, after touching 44.90 in early trade. Such levels were last seen on March 28.
“The rupee is slightly in a bearish mode because of the meltdown in global commodity prices,” said Abhishek Goenka, CEO, India Forex advisors. He expects the rupee to trade between 44.70-45 levels against the dollar this week.
Also, signs of the euro strengthening against the dollar could help the Indian currency to appreciate. The euro was at $1.45 at the close of the domestic forex trade on Friday, compared with $1.48 in the previous close.
The index of the dollar against six major currencies was down 0.06 per cent at 74.149 points when the domestic forex market closed on Friday, compared with its 73.090 points in the previous close.
Rebound in the domestic equity market had helped the rupee gain on Friday. Indian shares bounced back 1.7 per cent on Friday after nine sessions of decline as oil prices fell. Data showed the domestic equity markets had posted their biggest weekly loss in three-and-a-half months last week.