Mumbai: In a volatile trade, the Indian rupee logged its 6-week high and also 4-week low during the week under review, but recovered partly at the fag end of the week, still showing a fall of 26 paise to settle at 60.65 against the Greenback as dollar demand exceeded the supply.
In line with strong rally in local equities, sustained capital inflows and hopes of further rise in dollar value, the rupee touched a 6-week high of 60.19 on Monday, but fell back on some weakness in domestic stocks amid fresh dollar demand from importers and some banks.
Expectations of early interest rate hike by US Federal Reserve on economic recovery also weighed on the rupee, as it would prompt foreign funds to pull out funds from emerging markets, including India, to park in US.
Later, it dropped to a 4-week low of 61.04 level not seen since August 14, 2014 when it had touched an intra-day low of 61.13-- only to recover some ground to settle the week at 60.65, still showing a fall of 26 paise or 0.43 percent. Last week, it had gained 11 paise or 0.18 percent.
The benchmark S&P BSE Sensex extended gains for the fifth straight week, closing up by a mere 34.34 points or 0.13 percent while FPIs/FIIs injected USD 391.16 mln on first four days of the week, as per Sebi data.
Meanwhile, the factory output, as measured by the Index of Industrial Production (IIP) slowed down to 0.5 percent in July from 2.6 percent in July 2013 while Consumer Price Index (CPI) based on retail inflation eased marginally to 7.8 percent in August from 7.96 percent in July and 9.52 percent in August 2013.
Pramit Brahmbhatt, Veracity Group CEO said: "Indian Rupee lost almost one and half percent during the week taking cues from the strong dollar which is already elevated and is heading towards to post its ninth weekly gain in a row. Rupee tried to recover on last trading day and managed to get close below the psychological figure 61.00."
"The trading range for the Spot USD/INR pair is expected to be within 60.10 to 61.00," he added.
In the forward market, premium dropped further on sustained receipts by exporters.
The benchmark six-month forward dollar premium payable in February fell to 232.5-234 paise from 242.5-244.5 paise last week and far-forward contracts maturing in August 2015 also declined to 483-485.5 paise from 495.5-497.5 paise.
The RBI fixed the reference rate for the USD at 60.8044 and the euro at 78.6418 from preceding weekend's close of 60.4385 and 78.1953 respectively.
The rupee improved further against the pound sterling to end the week at 98.34 from 98.48 last weekend. It also shot up further to 56.60 per 100 Japanese yen from previous weekend's level of 57.41.
It, however, fell back to settle the week at 78.44 per euro from 78.26.
