1. Indian rupee retreats to fresh 2-year low at 65.54 against US dollar

Indian rupee retreats to fresh 2-year low at 65.54 against US dollar

The rupee fell back sharply by 27 paise to end at a new two-year low of 65.54 against the US dollar following renewed demand for the American currency from banks and importers.

By: | Mumbai | Updated: August 20, 2015 6:40 PM
indian rupee vs us dollar

The Indian rupee appreciated by 14 paise to 65.13 against the US dollar in early trade at the Interbank Foreign Exchange market today on increased selling of the American currency by exporters.(Thinkstock)

The rupee fell back sharply by 27 paise to end at a new two-year low of 65.54 against the US dollar following renewed demand for the American currency from banks and importers.

Sharp sell-off in global currency and financial markets predominantly pressurised the rupee to retreat after a brief rebound, but the greenback’s weakness against other currencies overseas restricted the fall, forex dealers said.

The dollar remained broadly lower against a basket of other major currencies mainly in response to the highly anticipated minutes from the US Federal Reserve meet in July amid dovish comments which left uncertainty over the timing of an interest rate hike.

Emerging market currencies too fell on concerns over the outlook for global growth against the backdrop of slowing growth in China.

The rupee opened firmly higher at 65.17 from overnight closing level of 65.27 at the Interbank Foreign Exchange (Forex) market and gained further strength to touch a high of 65.12 on fresh bouts of dollar selling by banks and exporters amid lower dollar overseas.

However, the local unit turned highly volatile in late afternoon trade and took a sudden reversal trend to hit fresh intra-day low of 65.56 before ending at 65.54, revealing a loss of 27 paise, or 0.41 per cent.

The rupee had gained four paise in the previous session.

The US dollar index, which tracks the greenback against a basket of six major rivals, was lower by 0.27 per cent at 96.17.

Meanwhile, the benchmark BSE Sensex plunged sharply by a whopping 323.82 points, 1.16 per cent, to end at 27,607.82.

Foreign portfolio investors (FPIs) sold shares worth a net Rs 423.72 crore yesterday, as per provisional data released by the stock exchanges.

Veracity Group CEO Pramit Brahmbhatt said,” The rupee continued to trade weak today on weak cues from local equities which closed over one per cent down as investors traded cautiously ahead of US jobs data.”

The trading range for the Spot USD/INR pair is expected to be within 65.20 to 66.00.

In the forward market, the premium for dollar dropped owing to sustained receivings from exporters.

The benchmark six-month premium payable in January declined to 191-193 paise from 194.75-196.75 paise yesterday.

Far-forward contracts maturing in July 2016 also dropped to 412-414 paise as compared to 417.5-419.5 paise.

The RBI fixed the reference rate for the dollar at 65.2385 and for the euro at 72.5713.

The rupee continued to slide against the pound sterling and finished at 102.64 as against 102.25 previously.

The local unit also slipped against the Japanese currency at 52.86 per 100 yen from 52.48 yesterday.

It fell back sharply against the euro to settle at 73.24 from 72.05 yesterday.

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