Rupee closes 11 paise lower at 66.54

Extending losses for the second straight session, the rupee slipped by 11 paise at 66.54 against the US dollar on sustained demand for the American currency from banks and importers amidst a higher greenback overseas.

Besides, persistent foreign capital outflows affected the rupee sentiment.

The local currency resumed higher at 66.34 as against yesterday's level of 66.43 at the Interbank Foreign Exchange (Forex) market and moved up further to 66.32 on initial selling of dollars by banks and exporters.

However, it washed out initial gains and dropped to 66.58 before concluding at 66.54, showing a loss of 11 paise, or 0.16 per cent.

The rupee has dropped 13 paise, or 0.19 per cent, in the two trading sessions.

It hovered in a range of 66.32 and 66.58 during the day.

According to forex dealers, the US dollar's strength will keep the rupee under pressure as investors are expected to trade cautiously and square off their positions ahead of the weekend.

The dollar index was up by 0.10 per cent against a basket of six currencies in the afternoon trade.

In the global market, the dollar extended gains against the Japanese yen for the third session but was mostly range-bound ahead of next week's highly anticipated Federal Open Market Committee meeting.

The Federal Reserve policy-makers are set to begin their next two-day meeting on Wednesday. Some market strategists and economists believe they could vote to raise interest rates next week, while others expect them to hold off.

Meanwhile, the benchmark BSE Sensex gained 11.96 points, or 0.05 per cent, to close at 25,610.21.