Rupee breaks 2-day winning run; dives 17 paise to 67.07

Snapping its two-day gains, the rupee on Thursday plunged by 17 paise to close at 67.07 on fresh dollar demand from banks and importers despite weakness in the American currency in the overseas market.

However, good foreign capital inflows coupled with sharp recovery in the equity market restricted the rupee’s loss against the dollar, a forex dealer said. The rupee resumed lower at 66.94 per dollar as against the Wednesday’s closing level of 66.90 at the Interbank Foreign Exchange market and dropped further to 67.09 before ending at 67.07, showing a loss of 17 paise, or 0.25 per cent. The domestic currency had gained by 12 paise, or 0.18 per cent, in previous two days. It hovered between 66.9150 and 67.09 per dollar during the day. The dollar index was trading down by 0.29 per cent against a basket of six currencies in the late afternoon trade. In the overseas market, the yen was stronger against its rival currencies on Thursday, as weakness in Tokyo stocks prompted investors to seek the perceived safety of the Japanese currency. The US dollar took a breather against its major rivals in early Asian trade, after climbing to a one-month high as a run of upbeat US economic data rekindled expectations of an early rate hike by the Federal Reserve. Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 225.84 crore on Wednesday, according to the provisional data released by the stock exchanges. In forward market on Thursday, premium for dollar dropped on good receivings from exporters. The benchmark six-month premium payable in July fell to 143-145 from its previous level of 148-150 and far forward January 2018 contract also declined to 294-296 from Wednesday’s closing level of 299-301.