Rupee off lows on profit-taking; banks sell dollars

REUTERS - The rupee is trading at 62.71/72 versus its close of 62.41/42 on Wednesday and sharply above the session low of 62.90 as traders book profits on long dollar positions after the early knee-jerk reaction to the Fed policy.

On Wednesday, the Fed announced a further $10 billion cut in its monthly bond purchases in a statement after its two-day policy meeting, reducing its monthly bond-buying to $65 billion per month starting in February.

Traders said the initial reaction was a bit stretched and prompted investors to book profits.

State-run banks were also spotted selling the greenback, pushing it off highs but further gains from current levels are not expected, dealers say.

Weakness in the domestic shares will also continue to limit a further upside in the rupee.

(Reporting by Swati Bhat)