Rupee slips 6 paise to 64.79 vs US dollar
Mumbai, Feb 26 : The rupee failed to hold on to its early gains and slipped by 6 paise to end at 64.79 against the US currency today due to fag-end dollar demand from importers and corporates.
A robust rally in local equities and sluggish dollar overseas failed to provide any fresh impetus.
Overall, forex sentiment turned shaky following a sudden run-up in global oil prices as currency traders stayed on the sidelines amid extreme caution ahead of macroeconomic data releases in a holiday-shortened week ahead.
The government will release GDP data for the December quarter on Wednesday.
The home currency touched a high of 64.62 and a low of 64.82 earlier.
The Indian rupee was under pressure last week on renewed concerns that an imminent Federal Reserve interest rate hike will accelerate capital outflows.
The rupee resumed firmly higher at 64.65 as compared to 64.73 previously at the interbank foreign exchange market.
It later gained ground to hit a fresh intra-day high of 64.62 on good dollar supply and surging local equities.
However, the momentum soon fizzled out due to dollar demand from importers and banks, with the currency retreating sharply to a low of 64.84 in late afternoon deals.
The home unit finally settled the day at 64.79, showing a loss of 6 paise, or 0.09 per cent.
The rupee had lost a sharp 52 paise last week.
On the international energy front, global crude prices extended gains to hit two-week highs largely supported by comments from Saudi Arabia that it would continue to curb exports in line with the OPEC-led effort to cut global supplies amid worries over US crude production at near record highs.
Brent crude futures were trading at USD 66.81 a barrel in early Asian trading after briefly scaling USD 67-mark.
Meanwhile, foreign investors and funds have pulled out nearly Rs 10,000 crore (USD 1.5 billion) from the Indian stock market so far this month primarily due to PNB fraud jitters coupled with global cues.
This is against a total inflow of over Rs 13,780 crore by foreign portfolio investors (FPIs) in January, latest data with the depositories showed.
The country’s forex reserves rose by USD 1.960 billion to USD 421.720 billion in the week to January 16, the Reserve Bank said.
The RBI, meanwhile, fixed the reference rate for the dollar at 64.6639 and for the euro at 79.6983.
Globally, the US dollar pushed lower against other major currencies on Monday, as caution dominated ahead of Federal Reserve Chairman Jerome Powell’s first congressional testimony scheduled later in the week.
The dollar index, which measures the greenback’s value against a basket of six major currencies, was up at 89.61 in early trade.
In cross-currency trades, the rupee fell sharply against the pound sterling to end at 91.02 per pound from 90.25 and fell back against the euro to finish at 79.93 as compared to 79.59 earlier.
The local currency also dropped against the Japanese yen to close at 60.77 per yens from 66.59 last weekend.
Elsewhere, the pound sterling rebounded to trade at fresh one-week high, taking advantage of hawkish comments from the Bank of England Deputy Governor that interest rates may rise at a faster pace amid weak US dollar.
The common currency euro, however, edged higher against the US currency ahead of ECB President Mario Draghi’s speech later in the day.
In forward market today, premium for dollar edged higher due to mild paying pressure from corporates.
The benchmark six-month forward premium payable in July moved up to 116.50-118.50 paise from 115-117 paise and the far-forward January 2019 contract also firmed up to 243-245 paise against 240.50-242.50 paise last Friday.
