India?s local unit pared its losses after Standard & Poor’s Ratings Services revised India?s economic outlook to stable from negative, dealers said.
On Thursday, the rupee closed at 45.45 against dollar as compared with its previous close 45.35. It opened at 45.40 and hit a low of 45.53 against the dollar.
Earlier on the day, rupee fell against the US dollar on Thursday as investors sought safety of Dollar globally on European concern and on speculation of China?s lending rates tightening.
?In the second session, S&P news acted as a trigger in rupee?s rise from day?s low. It helped increase India?s appeal for overseas investments,? said Madhusudan Somani, head of foreign exchange trading at YES Bank.
The 30-share sensitive index too closed at 17,519, up 29 points from its days low at 17,417. After the S&P news, some custodian foreign banks including HSBC, Citi, J P Morgan etc were seen selling dollar on their clients, according to the dealers.
During mid-trading session, the euro dropped against dollar breaking a crucial support at 1.3685 amid concern that Greece will fail to secure financial assistance from the European Union. It caused rupee?s losses against the greenback.
Government bond prices pared most gains prompted by S&P?s positive sentiment and ended off highs after RBI?s deputy governor KC Chakrabarty?s comments on government borrowing and inflation. The 6.35%, 2020 bond ended at 89.58 rupees or with 7.89% yield after moving in a range of nearly 30 paise in the last two hours of trade.
Intraday, the yield had touched 7.80%. The 10 year paper had ended at 7.95% on Wednesday. The deputy governor said there is more possibility of government borrowing being front-loaded and inflation was a greater concern than growth.