Mumbai: Resuming the week sharply lower, the Indian rupee later recovered partially from its more-than one-month intra- day low of 61.2050 logged on Thursday, still ending down by 16 paise at 60.81 against the Greenback as dollar demand exceeded the supply despite last four days of gains.
On Monday, it registered biggest fall of 48 paise in more than five weeks following heavy dollar demand from importers and negative cues from local equities.
A strong surge in dollar overseas also kept the rupee under pressure combined with expectations of higher trade deficit data. After currency markets closed Monday, government data showed that trade gap in August rose to USD 10.83 billion.
Slow-down purchases by foreign funds in local equities also weighed on the rupee. FPIs/FIIs picked up shares worth USD 13.47 million during the first four days of the week, as per Sebi data.
Hopes of early rise in interest rates by the US Federal Reserve in two-day policy setting meeting starting Tuesday, which might induce foreign funds to withdraw money from emerging markets, including India, also kept the rupee under pressure on the first day of the week.
Later, it rebounded as consensus expectations were that Fed will keep interest rates low for a while which came true as Federal Reserve pledged to maintain its easy monetary policy, giving relief to emerging markets.
The rupee later touched a high of 60.73 before settling the week at 60.81, still displaying a fall of 16 paise or 0.27 percent. Last week, it has plunged by 26 paise or 0.43 percent.
Meanwhile, the inflation measured on Wholesale Price Index (WPI) announced Monday dipped to 3.74 percent in August to a nearly five-year low from 5.19 percent in July and 6.99 percent in August 2013.
Pramit Brahmbhatt, Veracity Group CEO, said, "This week Rupee depreciated on the first day itself but later in the week it managed to recover partly. This week also local equities traded firm and closed on a positive note as rally in the global equities surfaced after the Fed reserve stated that rate hikes would not happen for a "considerable time."
"Recently some weak economic data forced Fed to maintain the wait and watch status. The trading range for the Spot rupee is expected to be within 60.40 to 61.40," he added.
In forward market, premium continued to rule weak on consistent receipts by exporters.
The benchmark six-month forward dollar premium payable in February dropped to 221.5-223.5 paise from last weekend's close of 232.5-234 paise and far-forward contracts maturing in August 2015 also moved down to 479.5-481.5 paise from 483-485.5 paise.
The RBI fixed the reference rate for the USD at 60.8055 and the euro at 78.4695 from previous weekend's level of 60.8044 and 78.6418 respectively.
The rupee fell back sharply against the pound sterling to 99.54 from 98.34 last weekend while remained firm to end at 55.89 per 100 Japanese yen from 56.60.
It, however, recovered to 78.17 per euro from 78.44 preceding weekend.
