Rupee hits two-month low, down 21 paise at 62.76

A smart rise in dollar index against its major rivals also put pressure on the currency

Tracking weak stocks, the rupee today fell 21 paise to end at two-month low of 62.76 against the greenback on sustained dollar demand from importers amid US rate hike concerns.

A smart rise in dollar index against its major rivals also put pressure on the rupee. There was caution before release of Current Account Deficit numbers. After forex markets closed, data showed CAD doubled to USD 8.2 billion or 1.6% of GDP in December quarter year-on-year.

After tanking 39 paise on Monday, the rupee resumed weak at 62.80 per dollar against overnight close of 62.55 at the Interbank Foreign Exchange (Forex) market.

It moved erratically in a range of 62.6175 and 62.83 before settling at 62.76, revealing a fall of 21 paise or 0.34%.

The Indian benchmark S&P BSE Sensex today closed lower by 135 points or 0.47% after plunging by 604.17 points or 2.05% yesterday. Foreign Portfolio Investors (FPI) invested Rs 838.30 crore yesterday, as per provisional data.

The weakness in the rupee was due mainly to hopes of early rise in interest rates by Federal Reserve by mid-year which hurts stocks and currencies from emerging markets after better-than-expected US jobs data.

Pramit Brahmbhatt, Veracity Group, CEO said: "Rupee traded weak and depreciated by over a quarter%. Negative sentiments continued to hammer local equities which closed down by nearly half percent. Dollar index continues to trade at multi-year highs. This further dented the rupee movement."

The trading range for the spot rupee is expected to be within 62.40 to 63.20, he added.