Rupee trims early gains, down 2 paise at 68.20

The rupee surrendered its early strong gains against the American currency and ended marginally lower by two paise at 68.20 despite dollar outlook remaining lacklustre.
Dealers attributed stray dollar buying by some banks on behalf of their clients to meet their import requirements.
However, calmer local equities which survived largely unhurt alongside smooth supply of dollars towards the fag-end limited any major fall.
The forex market displayed a remarkable level of volatility reacting to weekend developments after US President Donald Trump's reaffirmation of his protectionist stance sparked fresh concerns about the impact on Indian currency.
Meanwhile, the US dollar bore the brunt of investor displeasure and faced heavy selling pressure on the back of heightened uncertainty about the direction of US fiscal policy, a forex trader commented.

The domestic unit resumed firmly higher at 68.05 from last Friday's closing value of 68.18 at the Interbank Foreign Exchange (Forex) market and gained further ground to 68.02 on bouts of dollar selling.

However, it took a sudden reversal in mid-afternoon trade following heavy dollar demand and plunged to hit a fresh intra-day low of 68.23 before settling at 68.20, showing a small loss of 2 paise, or 0.03 per cent.
Stretching its downtrend for the fourth straight day, it has depreciated by a whopping 25 paise against the dollar.
Meanwhile, foreign investors have pulled out over Rs 5,100 crore from the Indian capital market so far this month on lingering concerns over growth slowdown as compared to other emerging markets.

The US dollar index was trading sharply lower at 100.34 in late afternoon session.
The RBI fixed the reference rate for the dollar at 68.0843 and for the euro at 72.1498.
Underlying rupee sluggishness was reflected in cross-currency trade too with the British pound taking a blow, plunging by 130 paise to 84.91 from weekend level of 83.61 per pound.
Meanwhile, the benchmark Sensex moved up further by 28.26
points or 0.10 per cent to close at 28,892.97 today.
In forward market today, premium for dollar declined further on sustained receivings from exporters.
The benchmark six-month premium payable in July dropped to 139.50-140.25 paise from its previous level of 142-144 paise and far forward January 2018 contract also fell to 295.25-296 paise from Wednesday's closing level of 297-299.

The RBI fixed the reference rate for the dollar at 66.8351 and for the euro at 70.5444.
In cross-currency trades, the rupee finished higher against the pound sterling at 83.26/28 from 83.30/32 but eased against the Euro to settle at 70.48/50 from 70.29/31.
The domestic currency rose against the Japanese Yen to 58.97/99 per 100 yen from 59.24/26 previously.
Note: Forex and Money markets will remain closed tomorrow on account of "Mahashivratri".