The Indian rupee snapped a five-day losing streak on Wednesday as dollar sales by a power sector financing firm helped offset demand from oil and gold importers while positive domestic shares also aided. Traders said gold importers were spotted buying the greenback to pay for their purchases, especially since the yellow metal remained within sight of almost four-month lows in the global market.

"Defence demand has been on the higher side these days along with the normal oil demand. But there were some inflows heard from a power sector financer," said A. Ajith Kumar, a foreign exchange dealer with Federal Bank. The partially convertible rupee closed at 54.55/56 per dollar versus its previous close of 54.85/86. The unit moved in a range of 54.4850 to 54.93 during the session.

In the offshore non-deliverable forwards market, the one-month contract was at 54.91 while the three-month was at 55.43. 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 all closed at around 54.72 with a total traded volume of around $4.65 billion.

Copyright Reuters, 2012