The rupee today retreated from its three-week high by losing 12 paise against the US dollar to end at 64.02 after the latest GDP numbers showed the country's growth slowed to a three-year low. Overall currency market sentiment turned highly volatile against the backdrop of concerns over sputtering domestic economy which unexpectedly slumped a three-year low of 5.7 per cent during April-June amid lingering impact of note ban late last year and also the launch of new GST regime. Fresh concerns over potential interest rate hike by the US Federal Reserve in the midst of strong macro data amid heavy capital outflows adding to downbeat mood. Meanwhile, a robust dollar demand from importers and corporates also weighed on rupee trade. The rupee opened a tad weak at 63.92 from Thursday's close of 63.90 at the Interbank Foreign Exchange (forex) market on fresh bouts of dollar demand. It remained under pressure most part of the day and once again breached the significant 64-mark to hit an intra-day low of 64.05 before ending at 64.02, showing a steep fall of 12 paise, or 0.19 per cent.
It briefly touched a high of 63.87 in mid-morning trade.The home currency had settled at 63.90 yesterday. For the week, it advanced by a mere 2 paise. The RBI, meanwhile, fixed the reference rate for the dollar at 63.9804 and for the euro at 76.1047. In contrast, domestic bourses continued their bullish advance for the third-straight day reflecting positivity on expectations of a rate cut by the RBI in the next policy meet following much weaker-than-expected economic growth data. The rally was also supported by strong Asian cues. The flagship Sensex climbed nearly 162 points to end at 31,892.23, while the Nifty jumped over 56 points to close at 9,974.40. Meanwhile, India's fiscal deficit at July-end touched 92.4 per cent - or Rs 5.04 lakh crore - of the Budget estimate mainly because of front-loading of expenditure by various government departments, according to the data of Controller General of Accounts (CGA). The government aims to bring down the fiscal deficit to 3.2 per cent of GDP in the current fiscal as against 3.5 per cent in 2016-17. On the global front, the dollar turned broadly lower against other major currencies after the release of disappointing US employment data dampened optimism over the strength of the economy. The dollar index, which measures the greenback's value against a basket of six major currencies, was down at 92.37. In cross-currency trades, the rupee fell back sharply against the pound sterling to end at 82.84 from 82.19 per pound and drifted against the euro to finish at 76.29 from 75.68 yesterday. The local currency also dropped against the Japanese yen to conclude at 58.12 per 100 yens from 57.80 earlier. In forward market today, premium for dollar displayed a sluggish trend owing to lack of market moving factors. The benchmark six-month premium payable in February edged up to 133-135 paise from 132-134 paise, while the far forward August 2018 contract was quoted unchanged at 273-275 paise. On the international energy front, crude prices retreated in Asian trading on Friday, partly reversing sharp gains from the previous session amid ongoing turmoil in the oil industry with nearly a quarter of US refining capacity offline aftermath of hurricane Harvey. The international new Brent contract for November delivery was down 8 cents, or 0.2 per cent, at $52.78 barrel.
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