Rupee stays weak as dollar gains overseas

MUMBAI: The Indian rupee remained weak in afternoon trades on Tuesday, retreating from the previous session\'s four-and-half-month high as the stock market edged down and dollar gained against majors.



* At 1:50 p.m., the partially convertible rupee was at 45.20/21 per dollar, weaker than 45.01/02 at close on Monday, when it had touched 44.99, its highest level since May 13. The rupee moved in 45.0150-45.2850 band so far, and is expected to move in the 45.15-45.25 band in the rest of the trade.



* \"There is some short-covering (of dollars) happening due to the euro sell-off and profit-taking in stocks,\" said a dealer at a foreign bank.



* The struggling dollar got a reprieve on Tuesday, helped by a report that the Federal Reserve was weighing a more open-ended, smaller-scale bond buying programme compared with 2009.



* The index of the dollar against six majors was up 0.4 percent and would be watched.



* Indian shares inched lower in flip-flop trading on Tuesday, as profit sales kicked in following robust foreign fund inflows-led rally, which helped the benchmark index log 11.9 percent gains so far this month.



* Foreigners have moved $4.8 billion into local shares this month, taking net investment so far in 2010 to $17.7 billion. The inflows had lifted the rupee 1.3 percent last week, its best weekly rally in three months.



* One-month offshore non-deliverable forward contracts were quoted at 45.36, weaker than the onshore spot rate.



* In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, MCX-SX and United Stock Exchange were all at 45.4450, with the total traded volume on the three exchanges at $1.7 billion.
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