Rupee slips from 1-week high, down 13 paise to 67.16

A renewed strength in dollar predominantly prassurised the local unit

Breaking its three-day rising trend, the rupee retreated from its one-week high to close at 67.16 against the US currency on fresh bouts of dollar demand from importers.

A renewed strength in dollar, which climbed to a two-month high against other major currencies, predominantly prassurised the local unit.

However, expectations of strong capital inflows amid surging local equities helped the domestic currency in recouping some losses, a forex dealer said.

The greenback has strengthened broadly in recent weeks since the Federal Open Market Committee (FOMC) released its hawkish April meeting minutes and comments by Fed officials suggested that the US central bank could raise rates as soon as early next month.

At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced substantially lower at 67.21 compared to last weekend's closing level of 67.03 and kept descending to hit a fresh intra-day low of 67.37 due to strong dollar demand.

But, it staged a remarkable rebound toward the fag-end following some dollar selling through state-run banks and finally settled at 67.16, revealing a loss of 13 paise, 0.19 per cent.

Meanwhile, the RBI fixed the reference rate for the dollar at 67.3398 and euro at 74.8415.

In cross-currency trades, the rupee maintained its firmness against the pound sterling and finished at 98.12 from 98.19 and also edged up against the euro to settle at 74.82 compared to 74.85 last weekend.

The home unit recovered sharply against the yen to end at 60.46 per 100 yens from 61.12 previously.

Meanwhile, FIIs remained net buyers after recent selling

and bought shares worth a net Rs 1,453.67 crore during the last week.

On the global front, the dollar held steady at two-month highs against the other major currencies after Fed Chair Yellen said Friday that it would be appropriate for the central bank to raise rates "gradually and cautiously" in the coming months if the economy and the lab or market continue to pick up as expected.

The dollar index, which tracks the world's reserve currency against a basket of its peers climbed to 95.94 - a fresh nine-week high - and was last at 95.70, down 0.03 percent from Friday's close.

In forward market, premium for dollar dropped sharply owing to sustained receiving from exporters.

The benchmark 6-month premium for October declined to 170-172 paise from 173-175 paise and far forward April 2017 contract also dropped to 364.5-366.5 paise against 370-372 paise from last weekend.

In the meantime, Indian bourses continued their stellar rally for the fifth straight day.

The flagship index Sensex rose by 72 points to finish at 26,725.60 while the broader Nifty climbed over 21 points to finish at 8,178.50.