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Rupee Rally Stumbles, Falls 23 Paise To 65.05 A Dollar

The rupee ended at a fresh one-week high of 64.82 yesterday against the American currency.
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The rupee today took a hefty knock by plunging 23 paise to close at 65.05 a dollar
The rupee today took a hefty knock by plunging 23 paise to close at 65.05 a dollar
Mumbai: Snapping its two-day winning run, the rupee today took a hefty knock by plunging 23 paise to close at 65.05 a dollar amid fresh demand for the US currency from importers coupled with sluggishness in equities.

Fresh capital outflows and month-end dollar demand from importers, mainly oil refiners to meet their import requirements largely kept the rupee under immense pressure.

The rupee ended at a fresh one-week high of 64.82 yesterday against the American currency.

Currency traders and speculators seemed reluctant to place aggressive bets and preferred to stay on the sidelines ahead of the weekend and also release of advance US GDP growth
number later in the day for fresh impetus.

The home currency resumed substantially lower at 65.02 as compared to Thursday's close of 64.82 at the Interbank Foreign Exchange (FOREX) market.

Reeling under immense dollar pressure, the local unit later tumbled to touch a fresh intra-day low of 65.1050 in late afternoon deals before ending at 65.05, revealing a steep loss of 23 paise, or 0.35 per cent.

On weekly basis, however, the rupee ended little changed. The RBI, meanwhile, fixed the reference rate for the dollar at 65.0931 and for the euro at 75.6837. The forex market sentiment also took cues from global crude prices hitting a fresh 27-month high of $59.87 a barrel, spurred by Saudi remarks supporting the oil production cut through to the end of 2018.

A strong recovery in greenback overseas backed by hawkish Fed comments might further collaborate towards keeping a lid on any meaningful recovery for the home currency even as the
European Central Bank on Thursday revealed the beginning of the exit process from its quantitative easing programme.

Meanwhile, domestic bourses took a breather after scaling fresh record intra-day highs on the back of profit-booking following tepid earnings outcomes from key banking heavyweights.

However, the flagship Sensex eventually ended at a new peak of 33,157.22 with a gain of 10.09 points, while Nifty shed over 21 points to 10,323.05.

The dollar index, which measures the greenback's value against a basket of six major currencies, was sharply up at 94.95 in early trade.

In cross-currency trades, the rupee rallied further against the pound sterling to finish at 85.17 from 85.69 per pound and rebounded against the Japanese yen to close at 57.00 per 100 yens compared to 57.04 earlier.

The local unit also bounced back against the euro to settle at 75.54 from 76.52 yesterday.

Elsewhere, the common currency euro tumbled to near three-month low against the greenback, heading for its biggest weekly loss of the year on the back of falling bond yields after the European Central Bank extended its bond buying well into next year.

In forward market today, the premium for dollar rebounded due to mild paying pressure.

The benchmark six-month premium payable in March edged up to 114-116 paise from 113.75-115.75 paise and the far forward September 2018 contract firmed up to 255-257 paise
from 253.50-255.50 paise overnight. On the international energy front, global crude prices traded firmly higher in early Asian trade buoyed by comments from Saudi Arabia's crown prince backing the extension of OPEC-led output cuts.

Brent was little changed after overnight steep rise to $59.55, its highest since July 2015. The contract is more than 30 percent above 2017 lows touched in June.

US light crude oil was down 4 cents at $52.60 but still 25 per cent above its June 2017 low. US crude prices have been capped by rising production.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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