Rupee ends little changed; sentiment positive

By Gaurav Pai

MUMBAI (Reuters) - The rupee ended almost unchanged on Wednesday as traders turned cautious in a holiday-shortened week, even as underlying factors are still seen as positive for the local currency.

Asian currencies posted losses on Wednesday as the dollar strengthened globally on the back of a victory by Republicans in the United States' mid-term elections, ending uncertainty about the political climate in the U.S.

Global factors, including the European Central Bank policy meeting on Thursday and the U.S. monthly jobs data on Friday, will likely determine the rupee's near-term direction.

However, underlying factors are seen as positive for the rupee, with inflation easing and continued foreign flows helping drive domestic shares to a fourth consecutive record high.

"Many traders are waiting on the sidelines for a clearer picture to emerge after the U.S. employment data, " said Chintan Karnani, chief analyst at Insignia Consultants, a currency risk advisory firm in New Delhi.

"If the numbers are strong, then the dollar strength will continue and rupee may find itself in a spot of bother."

The partially convertible rupee closed at 61.41/42 per dollar, largely unchanged from Monday's close of 61.40/41.

The pair traded in a narrow range on Wednesday as markets were closed on Tuesday, and will close again on Thursday due to local holidays.

Still, sentiment is positive, with traders also comforted by the drop in Brent crude to a new four-year low below $82 a barrel on Wednesday.

In the offshore non-deliverable forwards, the one-month contract was at 61.65/70, while the three-month contract was at 62.20/30.

(Editing by Sunil Nair)