Rupee hits over 1-week high on bunched-up dollar inflows

The rupee rose to a more than one-week high on Tuesday on bunched-up dollar inflows following a five-day weekend but losses in the domestic share market and demand for the greenback from importers prevented further gains.

Traders said the market would continue to remain rangebound in the absence of any major clues in the near-term.

The key retail and wholesale price inflation data is due to be released only next week, keeping markets in a tight range this week, they added.

"There were good inflows seen today, a large engineering firm was also selling. No major events this week, so expect a range of 61.20 to 61.80 on the pair," said Hari Chandramgethen, head of foreign exchange trading at South Indian Bank.

The partially convertible rupee closed at 61.43/44 per dollar compared with 61.61/62 on Wednesday. The rupee earlier rose as high as 61.3025, its strongest level since

Sept. 26.

Financial markets were closed from Thursday to Monday for local holidays.

Traders said bunched-up dollar inflows, especially after the US jobs data on Friday, aided the rupee despite the dollar demand from importers and weak local shares.

The BSE Sensex fell for a second straight session on Tuesday to its lowest closing level in nearly two months as cyclical stocks such as Hindalco Industries declined ahead of the earnings reporting season.

Traders will continue to monitor shares for clues on the direction of foreign fund flows. Foreign funds have bought a net $13.95 billion in equities and $20.17 billion in debt so far in 2014.

Emerging Asian currencies rebounded on Tuesday, thanks to the dollar's broad weakness and as the yen rose after Japanese Prime Minister Shinzo Abe mentioned the disadvantages of a weaker currency for the economy.

In the offshore non-deliverable forwards, the one-month contract was at 61.83 while the three-month was at 62.45.