Rupee to dollar: Indian currency ends little changed; inflation in focus, but Narendra Modi 'weighs'

Apr 10 2014, 17:59 IST
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'Indonesia a reminder that BJP's Narendra Modi could fail to get a majority in the ongoing five-week long elections.' (AP) 'Indonesia a reminder that BJP's Narendra Modi could fail to get a majority in the ongoing five-week long elections.' (AP)
SummaryRupee ended little changed against dollar, but Indonesia example may hit Narendra Modi: analyst

The Indian rupee ended little changed on Thursday to the US dollar as caution prevailed ahead of a slew of economic data, while American currency demand by state-run banks, which traders attributed to defence and oil-related payments, weighed on sentiment.

The data, starting with industrial output on Friday and consumer inflation on Tuesday, comes as voting gets underway in the country's general elections.

Two traders also cited some election jitters after an unexpectedly weak result in parliamentary elections for the front runner to be Indonesia's next president.

Although the Indonesian election do not have a direct impact on India, these traders say the results by Joko Widodo, or Jokowi, are a reminder that BJP's Narendra Modi could fail to get a majority in the ongoing five-week long elections.

"Biggest factor for Indian rupee moves will be election results in May but trade data and inflation numbers will also have limited impact," said Paresh Nayar, head of foreign exchange and fixed income trading at First Rand Bank, adding mixed data is expected around the corner so the market is cautious.

The partially convertible rupee closed at 60.07/08 per dollar compared with 60.14/15 on Wednesday.

The rupee had touched an eight-month high of 59.5950 on April 2, but has since given up the gains.

A rally in domestic shares on the back of heavy foreign buying has helped support the rupee. The BSE index hit a second consecutive record high earlier in the day but retreated to end nearly flat on profit-taking.

In the offshore non-deliverable forwards, the one-month contract was at 60.44, while the three-month was at 61.21.

FACTORS TO WATCH

* Dollar hit by Fed, Swedish Crown drops on inflation shock

* Emerging stocks near 5-month highs, China gains

* Shares rise on Fed minutes, eyes on Greek bond sale

* Foreign institutional investor flows

HIGHLIGHTS

* Rupee ends at 60.07/08 per dlr vs 60.14/15 pvs close

* Industrial output, inflation data awaited

* Election jitters seen after Indonesia poll setback

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