Indian rupee drops to one-week low of 63.41 vs US dollar, down 12 paise

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Mumbai | Updated: January 5, 2015 9:40:28 PM

The Indian rupee reacted downwards by 12 paise to log nearly one-week closing low of 63.41 against...

The Indian rupee today reacted downwards by 12 paise to log nearly one-week closing low of 63.41 against the Greenback on weakness in local equities amid fresh dollar demand from importers.

A firm dollar overseas too weighed on the rupee even as participants took heart from renewed capital inflows in the new year capped losses to some extent, forex dealers said.

At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced weak at 63.43 a dollar from last weekend’s close of 63.29. Soon after, it touched a low of 63.50 before bouncing back to a high of 63.28 on a temporary rise in local equities after morning session.

The rupee later again fell back in the fag-end in sync with with drop in domestic stocks to settle at 63.41 — logging a net loss of 12 paise or 0.19 per cent.

This is its weakest closing since 63.67 (December 29).

Veracity Group CEO Pramit Brahmbhatt said: “Rupee depreciated, taking cues from the dollar demand from banks and oil importers. Also, local indices closed in red. The trading range for the spot rupee is expected to be within 63.10 to 63.80.”

In the equity market, the benchmark BSE S&P Sensex today moved down by 45.58 points, or 0.16 per cent — breaking a long six-session upward trends.

FPIs had bought shares worth USD 41.60 million last Friday, as per Sebi data.

In the global currency market, the closely-tracked dollar index was up by 0.19 per cent against a basket of six major global rivals on hopes of rise in key interest rates by the US Fed. The US central bank is scheduled to release minutes on January 7 of the US Federal Open Market Committee meeting held on 16 and 17 December 2014.

“The dollar index continues to show strength against the basket of currencies. The Euro continued to weaken against the dollar today on Greece concerns and rising expectations that the ECB will implement Quantitative Easing measures early this year. Focus will be FOMC meeting minutes on Wednesday and US non-farm payroll data on Friday,” said Admisi Forex Director Suresh Nair.

Meanwhile, premia closed mixed in the forwards market.

The benchmark six-month premium payable in June softened to 225-227 paise from last Friday’s close of 226-228 paise.

Premium on forward contracts maturing in December, however, edged up to 434-436 paise from 433-435 paise.

The Reserve Bank of India fixed the reference rate for dollar at 63.3888 and for Euro at 75.6672.

The rupee shot up further to 96.74 against the pound from 97.65 previously and hardened to 75.53 per euro from 76.25.

It, however, fell back slightly to 52.68 per 100 Japanese yen from 52.52 last weekend.

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