The rupee today retreated from its near three-year high and ended lower by 14 paise at 63.51 against the US currency on fresh bouts of dollar demand amid concerns over the sluggish outlook for economic growth. Forex market sentiment turned little gloomy after the first advance estimate of GDP growth for 2017-18 showed its slowest in four years to 6.5 per cent, down from 7.1 per cent last year amid lingering effects of demonetisation and GST. Despite a strong start, the domestic currency succumbed to heavy dollar pressure towards the fag-end of trade. The rupee climbed to a fresh 3-year high of 63.25 in early trade before retreating, snapping a two-day rally. Fresh demand for the American currency from banks and importers along with the broad based dollar strength against some currencies overseas put the rupee on backfoot despite a record breaking rally in domestic equities, a forex dealer said. Globally, the greenback staged a rebound after a week of losses at the beginning of 2018 on growing expectations for upcoming rate hikes by the Federal Reserve, sidelining downbeat US employment data. In the meantime, global crude prices traded little soft, just below near three-year highs reached last week, although the losses appear capped amid lower US rig count. Brent crude, the international benchmark is trading marginally up at USD 67.79 a barrel in early Asian trade. Meanwhile, new year party at the domestic bourses extended into the second week as both flagship indices conquered yet another historic peak on frantic buying in IT, capital goods, healthcare and metal stocks even as investors awaited upcoming earnings releases. Both the benchmarks posted record gains on Friday to end the first week of 2018 on a stellar footing. Most Asian shares closed higher following the strong lead from Wall Street over the last session. The BSE Sensex rallied 199 points to end at 34,352.79, while Nifty jumped 65 points finish at 10,623.60. Maintaining its highly bullish trend, the rupee resumed high at 63.33 against last Friday's close of 63.37 on steady dollar amid firm equities. It later surged ahead to hit a fresh multi-year high of 63.25 in mid-morning deals before slipping back to trade in a narrow range with negative bias. However, extreme fag-end dollar pressure pushed the rupee to end at the day's lowest level of 63.51, showing a loss of 14 paise, or 0.22 per cent. For the first week of 2018, the rupee has appreciated by a healthy 50 paise. The dollar index, which measures the greenback's value against a basket of six major currencies, was sharply up at 92.06 in early trade. In cross-currency trades, the rupee fell back against the pound sterling to finish at 85.96 per pound from 85.81 and the Japanese yen also drifted to settle at 56.13 per 100 yens from 55.96 earlier. The local unit, however, advanced against the euro to close at 76.15 compared to 76.37. In forward market today, premium for dollar remained little weak owing to sustained receiving from exporters. The benchmark six-month premium payable in June eased to 132-134 paise from 133-135 paise and the far forward December 2018 contract also softened to 268.50-270.50 paise from 269- 271 paise.
Rupee slips 14 paise against US dollar amid economic concerns
Press Trust of India |