1. India rupee weakens by 4 paise at 66.14 against US dollar

India rupee weakens by 4 paise at 66.14 against US dollar

The rupee today turned weak against the US dollar, after a brief recovery yesterday, falling by four paise to end at 66.14 on renewed demand...

By: | Mumbai | Updated: August 26, 2015 7:17 PM
Indian rupee vs us dollar

The domestic currency resumed lower at 66.22 per dollar as against Tuesday’s closing level of 66.10 at the Interbank Foreign Exchange and dropped further to a low of 66.37 following robust dollar demand. (Reuters)

The rupee today turned weak against the US dollar, after a brief recovery yesterday, falling by four paise to end at 66.14 on renewed demand for the American unit from importers amid global volatility.

Sharp sell-off in domestic equity markets and robust dollar against major world currencies predominantly impacted the rupee sentiment, a forex dealer said.

Heavy capital outflows against the backdrop of volatile global situation amid Fed rate hike fears also added some pressure.

The domestic currency resumed lower at 66.22 per dollar as against Tuesday’s closing level of 66.10 at the Interbank Foreign Exchange and dropped further to a low of 66.37 following robust dollar demand.

However, the domestic unit witnessed a smart rebound to hit an intra-day high of 66.07 on the back of dollar selling by banks and export houses, before slipping back to end at 66.14, revealing a loss of 4 paise, or 0.06 per cent.

The dollar firmed up against the other major currencies due to strong US macro data which raised market expectations for an interest-rate hike from the Federal Reserve.

The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was substantially higher by 0.83 per cent at 94.70.

Meanwhile, the benchmark Sensex retreated to close sharply lower by 317.72 points at 25,714.66.

Foreign investors sold shares worth Rs 2,080.01 crore yesterday, as per provisional data from the exchanges.

Pramit Brahmbhatt, Veracity Group CEO, said, “The rupee showed range-bound movement today as investors preferred to stay cautious in the unsure market.

“Also, the local indices closed on weak note which further dented the rupee movement and forced it to depreciate slightly by 4 paise for the day to close at 66.14.”

The trading range for the Spot USD/INR pair is expected to be within 65.70 to 66.60.

In the forward market, premium for dollar dropped further on sustained receivings from exporters.

The benchmark six-month premium payable in January slumped to 184.5-186.5 paise from 189-191 paise.

Far-forward contracts maturing in July 2016 also fell sharply to 403.5-405.2 paise against 412-414 paise yesterday.

The RBI fixed the reference rate for the dollar at 66.1610 and for the Euro at 75.8867.

The rupee strengthened further against the pound sterling to settle at 103.11 from Tuesday’s close of 104.35 and also firmed up against the Euro to end at 75.51 from 75.97.

However, it fell back against the Japanese currency to end at 55.36 per 100 yen from 55.06 previously.

Tags: Indian Rupee
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