After touching a two-week high in early trade, the Indian rupee today closed 12 paise lower against the US dollar at 54.30 due to fall in local stock markets and renewed dollar demand from importers.
At the Interbank Foreign Exchange (Forex) market, the rupee started better at 54.15 a dollar as against previous close of 54.18. It improved further to an intra-day two-week high of 54.02, level not seen since February 28.
Dealers attributed early rally in the rupee to sustained dollar selling by exporters and some banks as also increased capital inflows as FIIs infused over Rs 300 crore in equities today as per provisional data with stock exchanges.
Weakness of dollar in the overseas market in early trade also boosted the rupee value, they added.
However, the rupee later turned negative to hit a low of 54.38 on bearish local bourses and fresh dollar demand from importers. It finally closed the day at 54.30, a fall of 12 paise or 0.22 per cent.
Yesterday, it had gained 23 paise or 0.42 per cent.
The Indian benchmark Sensex today continued its down-slide for the third straight day and tumbled by 202.37 points or 1.03 per cent.
The gauge of six major global currencies, the dollar index, washed out its early losses and was trading higher by 0.05 per cent in Europe today.
"The rupee was seen taking cues from the gains in the Dollar index, weakening euro and fall in the local equities. ...Going ahead, the overseas factors are likely to put pressure on the rupee. The Dollar index gains can extend further tomorrow if the much awaited US retail sales data beats the hopes," Abhishek Goenka, Founder and CEO, India Forex Advisors said.
