The rupee fell on Wednesday weighed by gains in the dollar after expectations of fresh monetary stimulus in the United States faded and local oil importers looked to cover payment obligations before the long weekend.
A fall in local stocks also added to the selling pressure on the rupee, traders said.
The rupee ended at 51.065 to the dollar, 0.71% (39 paise ) down from Tuesday’s close of 50.7050.
The financial markets are closed on Thursday and Friday for local holidays.
?We have seen the rupee pull back from near 50.50 which was a strong resistance level for it. Now, the next support for rupee is around 51.35 and then 51.55,? said A Ajith Kumar, senior manager of forex trading at Federal Bank.
Outlook on the rupee is bearish due to weak domestic fundamentals like a widening current account deficit and high global oil prices.
Bond yields eased marginally on Wednesday, as traders bet on the possibility of improved cash conditions ahead, a day after the government’s first auction for fiscal 2012/13 met with dismal demand. An auction of treasury bills to raise 110 billion rupees ($2.17 billion) saw aggressive participation in the 91-day segment.
The 10-year yield closed at 8.69% from Friday’s close of 8.74%. Banks’ borrowing via the repo window came down to R8,3795 crore against R1.38lakh crore on Tuesday.
