Rupee plunges to one-week low of 64.44, US Fed decision eyed

In line with equities, the rupee today weakened further by 20 paise to end at a one-week low of 64.44 amid impending Fed rate hike fears.
Investors maintained cautious stance ahead the release of key macroeconomic data -- industrial output data (IIP) for April and retail inflation numbers for May -- released after market hours.
Forex sentiment wavered as bit of caution set in ahead of this week's monetary policy decision from the US Federal Reserve, which is expected to include interest-rate hike.
The local unit opened sharply lower at 64.30 against last weekend's close of 64.24 at the Interbank Foreign Exchange (Forex) Market.

It kept drifting throughout the session impacted by severe dollar pressure and touched an intra-day low of 64.46 in late afternoon deals, before finishing at 64.44, revealing a steep loss of 20 paise, or 31 per cent.
The RBI, meanwhile, fixed the reference rate for the dollar at 64.3407 and for the euro at 72.1324.

Sluggish domestic equities also impacted the currency market.
Retail inflation fell to a record low of 2.18 per cent in May and Industrial production growth slipped to 3.1 per cent in April.
This is the biggest one-day fall for the home currency in nearly three-weeks.

However, robust capital inflows and weak dollar overseas cushioned the rupee fall.
Foreign investors and funds have pumped in nearly USD 2 billion in the country's capital market in the last seven trading sessions due to finalisation of GST rates for bulk of the items and forecast of a normal monsoon.
Domestic bourses encountered fresh bouts of selling pressure following heavy unwinding in PSU banking stocks as sentiment took a hit after Maharashtra government agreed to write off the farm loans and also ahead of key data release.
The flagship Sensex tumbled over 166 points to end at 31,095.70, while Nifty shed almost 52 points to settle 9,616.40.

On the global front, the greenback remained under immense pressure in the face of UK's political jitters amid speculative sell-offs with upcoming Fed's meeting taking center stage.
British pound steadied after last weekend crash on prospect of a "hung parliament".
The dollar index, which tracks the US currency against a basket of six major rivals, was down 0.14 per cent at 97.10.
In cross-currency trades, the rupee strengthened further against the pound sterling to end at 81.83 from 82.07 per pound, but dropped further against the Euro to finish at 72.36 from 71.88 last Friday.
It also weakened further against the Japanese Yen to settle at 58.66 per 100 yens from 58.20 earlier.

Meanwhile, country's forex reserves surged by USD 2.404 billion to reach life-time high of USD 381.167 billion in the week to June 2 on account of rise in foreign currency assets.
In forward market today, premium for dollar declined owing to sustained receiving from exporters.
The benchmark six-month premium payable in November moved down to 136-138 paise from 138.75-139.50 paise and the far forward May 2018 contract also slipped to 280-282 paise as against 282-50-283.50 paise last weekend.
On the International commodity front, crude oil prices rebounded, breaking a three-day losing streak, after futures traders increased their bets on a renewed price upswing even though physical markets remain bloated, especially from a relentless rise in US drilling.