Rupee hits 5-week low of 69.06, drops 27 paise against US dollar

The Indian rupee on Thursday dropped by 27 paise to close at a near five-week low of 69.06 against the US dollar amid strengthening of the American currency and heavy selling in domestic equities.

Forex traders said though the US Federal Reserve cut the benchmark lending rate on Wednesday for the first time in more than a decade, market participants reacted to Fed Chair Jerome Powell statement which dampened hopes of further rate cut.

At the interbank foreign exchange (forex), the domestic currency opened at 69.17 a dollar and touched a high of 69.01 and a low of 69.20 during the session.

The domestic currency finally settled at 69.06 a dollar, down 27 paise over its previous close -- its weakest level since June 27.

"The rupee is under pressure today due to sharp rise in the dollar index after the Federal reserve ruled out prolonged easing cycle," Rushabh Maru, research analyst - currency and commodity, Anand Rathi Shares and Stock Brokers, said.

Maru further noted that "in the short term the rupee might depreciate to 69.80 - 70 levels on account of weak momentum in the domestic equities. Focus will now shift to the RBI monetary policy."