Re ends near six-month low on oil importers' $ demand

Fall in domestic shares also dampened rupee sentiments against the dollar

The rupee fell against the dollar for a second straight day this week, due to dollar demand by oil importers.

The dollar gained against other Asian currencies amid speculation that the US Federal Reserve would trim its bond purchases, known as quantitative easing, sooner than expected.

According to currency traders, the movement of the rupee tomorrow depends on the statement of Fed Chairman Ben Bernanke, expected tonight.

The rupee had opened at Rs 54.98 against the dollar today and during intra-day trades, it touched a high of Rs 54.95 before closing at a near-six month low at Rs 55.42. The rupee had ended at Rs 55.11 yesterday.

The fall in domestic shares also dampened rupee sentiment against the dollar. Some dealers feel the stock market rally is nearing its peak, due to which the rupee could weaken from current levels in the days to come.

  “The rupee is expected to trade in the range of Rs 55 to Rs 55.50 on Wednesday,” said a currency dealer with a public sector bank.

The bias is more towards weakening of the rupee against the dollar.

According to data on the website of the Securities and Exchange Board of India, foreign institutional investors invested $293.20 million (Rs 1,620 crore) today, compared with $313.41 yesterday.

Month-end importers’ demand for the dollar is also expected to continue, due to which the rupee might weaken further, said dealers.