Rupee pares early losses on dollar sales

Indian rupee erased early losses and currently trading with moderate gains against American currency in late morning session on Wednesday. Dollar selling by banks supported local unit to gain the momentum while dollar demand by oil importers and fall in domestic equity markets is limiting rupee gains. Meanwhile, euro remained around two-year lows against US currency as investors are worried about the outcome of a German court hearing on the euro zone's bailout fund. The global risk factors as well as domestic data like May IIP ahead of RBI’s monetary policy announcement on July 31 will decide future direction of rupee.

The partially convertible currency is currently trading at 55.27, stronger by 11 paise from its previous close of 55.38 on Tuesday. It has touched a high and low of 55.93 and 55.68 respectively. The Reserve Bank of India's (RBI) reference rate for the dollar stood at Rs 55.80 and for Euro it stood at Rs 68.58 on July 10, 2012. While, the RBI’s reference rate for the Yen stood at 70.22, the reference rate for the Great Britain Pound (GBP) stood at 86.5320. The reference rates are based on 12 noon rates of a few select banks in Mumbai.