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The Indian rupee fell to its lowest in almost a month on Wednesday, after the euro’s fall from a seven-week peak triggered dollar demand from importers and a weakness in global stock markets underpinned sentiment.

The partially convertible rupee ended at 47.0150/0250 per dollar, off an intraday low of 47.1550, weakest since June 9 and about 0.3 per cent lower than Tuesday’s close of 46.89/90.

“A shaky euro pushed the rupee lower as there was uncertainty whether it would stay at the current peak levels,” said a senior dealer with a foreign bank in Mumbai. He expects the rupee to trade in a range of 46.90 to 47.10 a dollar on Thursday.

The euro slipped off seven-week highs against the dollar on concerns about the global economic recovery and as investors scrutinised details of plans to test the financial health of European banks.

A European committee of bank supervisors will outline on Wednesday the methodology for stress tests of about 100 banks but German banking sources said the test would exclude a haircut on German sovereign bonds.

Lower local share prices also hit sentiment, traders said. The benchmark BSE share index fell 0.8 per cent, hurt by weaker global markets, concerns on recovery in the US economy and nervousness about the European banking stress test.

Foreign funds have bought around $6.8 billion worth of Indian equities so far in 2010, after pumping in $17.5 billion in 2009.

Dealers said a few foreign banks were buying dollars cheaper locally to sell at a higher rate in the offshore non-deliverable forward (NDF) market.

The one-month offshore non-deliverable forward contracts were quoted at 47.25/35, higher than the one-month onshore forward rate of 47.22 at close of trade.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX ended at 47.1875 and 47.19 respectively. The total traded volume on the two exchanges at about $6.1 billion.

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