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Rupee slips to 1-week low, down 5 paise on firm dollar demand

However, better macro conditions as well as higher local stocks cushioned the impact

Press Trust of India  |  Mumbai 

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The rupee fell back marginally after a mild overnight recovery to end at a fresh one-week low of 65.07, down 5 paise against the US dollar on fresh bouts of demand from the from

Despite a strong start, the home currency failed to claim much ground in the face of steady amid bullish overseas undertone.

However, better macro conditions as well as higher local stocks cushioned the impact.

The rupee breached the 65-mark briefly in early trade to hit a high of 64.8950 before drifting lower.

Forex market trading was largely muted as traders preferred to stay on the sidelines and avoided taking long positions in the face of consistent capital outflows along with strong from importers, a forex dealer commented.

The rupee resumed firm at 64.98 against Monday's close of 65.02 at the interbank foreign exchange market on sustained selling of the greenback by banks and exporters.

Trading with a well-limited range, the local unit advanced to hit an intra-day high of 64.8950 in mid morning deals before retreating sharply.

It touched a low of 65.10 towards the fag-end trade before concluding at 65.07, revealing a loss of 5 paise, or 0.08 per cent.

Yesterday, the rupee had ended marginally higher by 2 paise against the greenback.

The RBI, meanwhile, fixed the reference rate for the dollar at 64.9256 and for the euro at 76.3395.

Meanwhile, domestic equity markets extending strong rallying momentum for the second-straight day following sustained buying activity in key heavyweights on hopes for a stronger-than-expected Q2 earnings season ahead and also mood buoyed by positive global sentiment.

The Sensex rose 100.62 points to end at 32,607.34, while Nifty reclaimed the 10,200 mark with a 23 point jump.

In the meantime, painting a brighter future, Minister Arun Jaitley today said the Indian economy is on a strong wicket with sound macro-economic fundamentals.

At a press briefing to detail state of the economy, he said India has been the fastest growing major economy for the last three years and the attempt is to maintain high growth rate in coming years.

On the global front, the US dollar was trading near two-week highs against a basket of the other major currencies ahead of key macro data even as speculation over who will be the next chairman of the Federal Reserve continued.

The dollar index, which measures the greenback's value against a basket of six major currencies, was trading higher at 93.75 in early trade.

In cross-currency trades, the rupee drifted back against the pound sterling to end at 85.69 from 85.60 per pound and declined against the Euro to settle at 76.54 from 76.33 yesterday.

The local unit also moved down against the Japanese yen to finish at 57.21 per 100 yens compared to 57.12 earlier.

Elsewhere, the common currency is trading little changed against the US dollar after series of manufacturing and services data failed to boost the currency ahead of highly awaited ECB meeting on Thursday.

Sterling too weakened after Brexit-talks related optimism faded away.

In forward market today, premium for dollar eased due to mild receiving from exporters.

The benchmark six-month premium payable in March softened to 117.50-119.00 paise from 117.50-119.50 paise and the far forward September 2018 contract edged down to 256.50-258.50 paise from 257-259 paise previously.

On the international energy front, global crude prices inched up on Tuesday, supported by declining exports from southern Iraq.

London Brent crude for December delivery was up 6 cents at USD 57.43 a barrel in early Asian trade.

The US crude for December delivery was up 3 cents at USD 51.93, having settled up 6 cents.

First Published: Tue, October 24 2017. 21:12 IST