Rupee weak on euro, Asian peers; dollar flows cap fall

At 10:54 am (0524 GMT), the partially convertible rupee was at 44.37/38 per dollar, weaker than Friday's close of 44.325/335. On Friday, it had touched 44.30 -- a level not seen since May 3.

"(Dollar) inflows are continuing limiting the (rupee's) losses," said a foreign exchange dealer at a state-owned bank.

"But factors like stocks and the euro are rupee-negative and will keep it in a 44.35-44.50 range."

So far in the day, the rupee has moved in a 44.35 and 44.43 band.

The euro was at USD 1.4187 versus USD 1.4255 at end of domestic currency trade on Friday, while the index of the dollar against six major currencies was up 0.28% at 75.343 points.

It had been at 75.290 points at end of local forex trade on Friday.

The euro hit two-week lows versus the dollar and the Swiss franc on Monday in the lead-up to an emergency meeting among top European officials worried that the debt crisis was spreading to Italy, the region's third largest economy.

Indian shares were down 0.5% on Monday, weighed down by weaker Asian markets.

Foreign funds have poured over USD 2.42 billion in local equities over 11 sessions since June 24, the latest data from the Securities and Exchange Board of India showed. The rupee appreciated over 1.2% during this period.

Most Asian currencies retreated against the dollar.

The one-month onshore forward premium was at 26 points from 23.75 on Friday, while the three-month rose to 72.25 points from 73 and the one-year was at 245.75 points versus 249.

One-month offshore non-deliverable forward contracts were quoted at 44.51, weaker than the onshore spot rate.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange were all at 44.4975. The total volume was at USD 2.22 billion.