Weekly review: Indian rupee to US dollar

Jun 14 2014, 17:11 IST
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Sustained dollar demand from importers and some weakness in local equities also weighed on the rupee, a forex dealer said. Reuters Sustained dollar demand from importers and some weakness in local equities also weighed on the rupee, a forex dealer said. Reuters
SummaryHeavy fall in the Indian rupee value against the US dollar after global oil prices...

Heavy fall in the Indian rupee value against the US dollar after global oil prices surged on supply concerns over the unrest in Iraq led the Indian currency to log its third straight weekly fall in an otherwise dull trading week.

Sustained dollar demand from importers and some weakness in local equities also weighed on the rupee, a forex dealer said.

Crude prices logged a nine-month high after militants closed in on Iraq's capital Baghdad, fuelling fears over supplies from the crude producer.

US benchmark, West Texas Intermediate, advanced 73 cents to USD 107.26 after surging USD 2.13 in New York to reach its highest level since September.

At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed the week better at 59.10 a dollar from last weekend's close of 59.17 and immediately touched a high of 58.98 on firm local equities.

Later, it moved in a narrow range till Thursday on alternate bouts of demand and supply before succumbing to heavy dollar demand from importers on Friday to register a low of 59.80. It finished the week at 59.77, revealing a fall of 60 paise, or 1.01 per cent.

It has plunged by 125 paise, or 2.14 per cent.

On Friday, it lost 52 paise -- its biggest drop since January 24, 2014 -- when it had dropped by 73 paise.

The benchmark S&P BSE Sensex closed down by 168.29 points, or 0.66 per cent, while FIIs injected USD 640.68 million in the first four days of the week, as per Sebi data.

"Suspected intervention by the central bank was seen in the afternoon and demand for the greenback from importers put pressure on rupee," said Kiran Kumar Kavikondala, Director & CEO, WealthRays Securities.

Pramit Brahmbhatt, Veracity Group CEO said, "Rupee depreciated during the week taking cues from local equities which gave up almost all the gains posted during the week.

"In spite of FIIs buying shares worth Rs 1,557 crore till Thursday, indices closed on a weak note. On Monday, the trading range for the Spot USD/INR pair is expected to be within 59.30 to 60.30."

Meanwhile, raising hopes of recovery, the Index of Industrial Production (IIP) grew at 3.4 per cent in April after contracting for two months in a row and May retail inflation (CPI) fell to three-month low at 8.28 per cent compared with 8.59 per cent in April.

Forward dollar premiums dropped on fresh receipts by exporters.

The

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