ALSO READRupee hits 3-month peak of 66.85 against US dollar Rupee scales near 4-month high of Rs 66.67, up 4 paise Rupee retreats from 17-month high, down 14 paise against dollar to 65.44 Rupee rallies to 17-month high in voltaile trading, up 6 paise at 65.30 Rupee sinks 17 paise to 64.67 on global woes
The rupee on Tuesday weakened further to close 4 paise lower at 64.38 against the US dollar on sustained demand for the American currency from importers. With the FOMC rate decision fast approaching, overall forex market undertone remained little shaky as currency traders preferred to stay on the sidelines and avoided taking any long positions. Fresh unwinding by Foreign portfolio investors (FPIs) also weighed on the rupee sentiment. However, a breathtaking record rally in local equities along with subdued dollar overseas trend largely cushioned the fall, a currency trader said. The rupee opened substantially lower at 64.42 from overnight close of 64.34 at the Interbank Foreign Exchange (forex) market. It remained under pressure throughout the day and swung between 64.35 and 64.42 due to uneven dollar demand and supply before ending at 64.38, showing a loss of 4 paise, 0.06 per cent. The RBI, meanwhile, fixed the reference rate for the dollar at 64.3580 and the euro at 75.0607. In cross-currency trades, the rupee continued to drift against the pound sterling and settled at 83.96 from 83.85 per pound and dropped further against the euro to finish at 75.05 as compared to 74.92 earlier. The domestic unit, however, recovered against the Japanese yen to close at 57.77 per 100 yens from 58.09 yesterday. The US dollar was little changed against its major rivals as the focus of attention shifted to the Federal Reserve's statement outcome on Wednesday, where consensus remains pretty divided. Meanwhile, domestic equities retreated after hitting an all-time historic high as caution and resistance returned to the forefront, triggering profit-taking in select frontline heavyweights. In a landmark achievement, the benchmark Nifty conquered the key 10,000 milestones in early session. Marking a strong year, Indian market has been witnessing a series of record breaking rallies on account of normal monsoon, smooth GST rollout, reform initiatives and other macro factors. On the global front, the dollar slumped to over one-year low against a basket of currencies on Tuesday as investors grew more wary on the short-term outlook although they held off placing more bearish bets ahead of the Federal Reserve meeting starting today. The dollar index, which measures the greenback against a basket of currencies, was down at 93.54 during Asia trade - its lowest since June 2016. In forward market today, premium for dollar eased further on sustained receipts by exporters. The benchmark six-month premium payable in December declined to 124-126 paise from 126-128 paise and the far forward June 2018 contract also edged down to 270-272 paise from 273-275 paise. On the International commodity front, crude prices extended gains for the second day after OPEC moved to cap Nigerian oil output and Saudi Arabia pledged to limit exports next month to help rein in global oversupply.
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