Spot Firms Up, Premiums Soft
The spot rupee ended firmer at 47.10 as against its Wednesday's close of 47.1075/11 due to lacklustre trading.
The premiums also ended softer on the back of a stable call and no buying interest in the market.
The spot rupee opened the day at 47.1120/1250 and kept a narrow range of 47.10 to 47.1150/12, leaving very little room for speculative trading.
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"The purchasing interest has totally disappeared from the market leaving little room for the rupee to move. The rupee saw some support at ten levels with state-run banks purchasing in order to support the rupee," said a dealer with a new private sector bank.
The demand continued to be little as interest waned on account of rumours about political instability dispelled.
"The supplies were marginal but since the demand was practically non-existent. Tomorrow, the spot rupee could keep a narrow range of 47.10 to 47.12 for the entire trading session," he added.
The spot rupee should keep a range of 47.10 to 47.13 with support expected at 47.10 levels in order to curtail the rupee's rally. The Reserve Bank of India's reference rate for the dollar is Rs 47.12.
The forward premiums also ended soft after a dull day. The 6-month (annualised) closed at 4.78 per cent as against 4.80 per cent while the one-year annualised ended at 4.84 per cent as against 4.85 per cent from Wednesday.
"The premiums adjusted to the carry-over cost of the weekend and opened a little low. The premiums rallied in the day and closed after recovering marginally from its high," said a dealer with a foreign bank.
"The premiums are expected to continue in this vein even tomorrow," he continued.
"The overnight call rate also remained stable ending the day at 6.70 per cent to 6.80 per cent. This trend is likely to continue even tomorrow. With no interest in the market, exporters are not selling waiting for better levels while importers are purchasing on cash basis," said a dealer with a new private sector bank.
Tomorrow, the 6-month (annualised) should keep a range of 4.75 per cent to 4.80 per cent.