Rupee at 2-mth lows, plunges 46 p to 55.16 on USD demand
The rupee today weakened by a whopping 46 paise to close at a fresh 2-month low of 55.16 on the back of a surge in US dollar demand from importers and sustained weakness in local stock market.
The rupee commenced lower at 54.85 a dollar from its previous close of 54.70 at the Interbank Foreign Exchange (Forex) market today and immediately touched a high of 54.83 tracking the initial rise in domestic stock market.
However, it later turned weak and fell to a low of 55.20 on a strong dollar in overseas market amid investors winding up positions in global equities, said traders.
Coupled with a surge in dollar demand and sudden sell-off in Indian stocks, the rupee remained under pressure to finally close at 55.16 -- a fall of 46 paise or 0.84 per cent.
As global stock markets took a plunge on risk aversion, investors bet on the US currency, driving up the Dollar Index by 0.29 per cent against a basket of six major rivals.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: "The US "fiscal cliff" concerns continued to dominate global financial markets. A weak domestic sentiment also added fuel to the weakening momentum as the rupee touched September 13 lows. Defence-related payments and FCCB redemptions this month also put pressure."
The Indian stock market benchmark Sensex today closed down by 162 points or 0.88 per cent at two-month lows.
"The earlier gains in rupee were seen on account of recovery in the euro. The weakness in rupee was supported by the
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