Mumbai: The rupee reacted marginally downwards by five paise to end the shortened week at 62.36 against the Greenback on fresh dollar demand from importers amid weakness in local equities.
Fresh capital outflows also weighed negatively on the market, a forex dealer said.
The Forex market was closed on April 14, 2015, for observing "Dr Baba Saheb Ambedkar Jayanti".
The rupee opened slightly lower at 62.33 per dollar as against the last weekend's level of 62.31 and fell further to 62.5650 on renewed dollar demand from importers.
However, it trimmed its losses and recovered to 62.28 on mid-week selling of dollars due to weakness in USD overseas before ending the week at 62.36, still showing a loss of five paise or 0.08 percent.
The domestic currency had gained by 18 paise or 0.29 percent in the last week.
The Indian benchmark S&P BSE Sensex plunged by 437.28 points or 1.51 percent during the week, snapping two weeks of winning string while FPIs bought shares worth USD 21.88 million in the first three trading days of the week, as per Sebi data.
Meanwhile, the retail inflation measures by the consumer price index (CPI) was down to three-month low of 5.17 percent in March, 2015 as against 5.37 percent in February 2015 and the wholesale price index (WPI) inflation fell to a record low of (-) 2.33 percent in March, 2015 from (-) 2.06 percent in February, 2015.
Oil prices fell in Asia as investors locked in profits following a six-day rally, with a rise in OPEC's output in March also adding to downward pressure, analysts said.
However, in New York, the US dollar ended the week 2.1 percent lower against the euro, its largest weekly loss against the single currency in four weeks, as a mass of weak US economic data caused traders to rethink the timing of what would be the first increase to the fed funds rate since 2006.
Lack of fresh trading cues made investors reluctant to take irregular, strong positions ahead of the weekend.
Amid thin liquidity, investors avoided making major moves especially after a series of soft US economic data.
Mr. Pramit Brahmbhatt, Veracity Group CEO said,"This week not much movement was seen in the USDINR pair. Rupee traded range bound as investors preferred to be cautious in the uncertain market where investors are waiting for the trigger to choose the direction in the market, though on weekly basis Rupee slightly depreciated as local equities traded weak. Dollar index also lost its way this week and posted a weekly fall which prevented Rupee from falling down further."
"The trading range for the Spot USD/INR pair is expected to be within 61.80 to 62.80," he added.
Forward dollar premium ended lower on sustained receivings by exporters.
The benchmark six-month forward dollar premium payable in September fell further to 214.5-216.5 paise from last weekend 224.5-226.5 pasie and far-forward contract maturing in March dropped to 437-439 paise from 457.5-459.5 paise.
The RBI fixed the reference rate for the US dollar at 62.3460 and the euro at 67.1342 from last weekend's level of 62.3660 and 66.4884 respectively.
The rupee dropped against the pound sterling to end the week at 93.65 from 91.09 on last Friday and also fell to 67.32 per euro from 66.01 last weekend.
It tumbled against the Japanese yen to 52.52 per 100 yen from 51.76 in preceding weekend's level.
