Mumbai: The rupee weakened by 9 paise to trade at 62.02 against the dollar in early trade on Monday at the Interbank Foreign Exchange market due to increased demand for the US currency from oil importers.
Dealers largely expect Finance Minister P. Chidambaram to stick to his fiscal deficit aim of 4.8 pct this FY; will also look at market borrowing numbers for FY15. "Big expenditure numbers will be negative for the rupee," says a dealer with a state-run bank.
Traders will also watch domestic stock and debt markets for clues on the direction of foreign fund flows. Most Asian share markets edged higher on Monday in a nod to the resilience of Wall Street, but Japanese stocks struggled with both a stronger yen and a surprisingly weak reading on economic growth. Local shares up 0.5 per cent.
Forex dealers said fresh demand for the American currency ahead of the interim Budget for 2014-15 mainly put pressure on the rupee but a higher opening in the domestic equity market and the dollar's weakness against other currencies overseas, capped the rupee's fall.
The rupee bounced back by 49 paise to close at a three-week high of 61.93 against the US dollar in the previous session on Friday, tracking a smart rise in stocks after wholesale inflation fell to an eight-month low.
Meanwhile, the benchmark BSE Sensex rose by 102.92 points, or 0.50 per cent, to 20,469.74 in early trade on Monday.
(With additional information from moneycontrol.com)
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