Rupee Weakens, Snapping Four-Day Advance, as Importers Seen Buying Dollars

India’s rupee weakened, snapping a four-day advance, on speculation importers will step up dollar purchases as a gauge of the U.S. currency’s strength climbed.

The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, rose as much as 0.8 percent, data compiled by Bloomberg show. Offshore forwards indicated investors increased bets for the rupee’s weakness.

“The dollar is recovering against most currencies and the rupee is moving in line with that trend,” said Sudarshan Bhatt, Mumbai-based chief foreign-exchange trader at state-owned Corporation Bank. “Now that the currency has reversed its recent direction, importers may boost dollar purchases.”

The rupee declined 0.6 percent at 46.84 per dollar as of the 5:00 p.m. close in Mumbai, according to data compiled by Bloomberg. That boosted the currency’s losses this quarter 0.6 percent, the worst performance among the 10 most-traded Asian currencies outside of Japan.

Offshore forwards indicated the currency will trade at 47.47 to the dollar in three months, compared with expectations of 47.15 yesterday. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.

To contact the reporter responsible for this story: Anil Varma at avarma3@bloomberg.net

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