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Rupee breaks 4-day winning run, drops 88p at 70.46 per dollar as crude rebounds

Press Trust of India  |  Mumbai 

Snapping its four-day rising streak, the Monday dropped by 88 paise, its biggest single-day loss in more than three months, to close at 70.46 against the US as rebounded and the US gained strength.

Forex dealers said increased dollar demand from importers amid firming global crude and a strong dollar weighed on the sentiment.

Crude prices rebounded on Monday after Russian and Saudi Arabia's agreed to extend their agreement to limit production to arrest a slump in global prices.

Crude surged over 3.85 per cent to USD 61.75 per barrel in global markets.

The opened lower at 69.87 and fell further to settle lower by 88 paise or 1.26 per cent, its biggest single-day loss in since August 13, at 70.46 per US dollar. The rupee had strengthened by 27 paise to close at a four-month high of 69.58 against the US Friday.

Forex dealers said the American currency gained strength after the US and agreed to put off imposition of higher tariffs from January 1 while entering a 90-day period of talks to bring an end to the dispute.

"The rupee has declined on account of sharp rebound in the in the international market. Further India's GDP and fiscal deficit data disappointed the market. Hence the rupee is under pressure," said Analyst, Shares and Stock Brokers.

India's economic growth slowed to 7.1 per cent in the September quarter as consumption demand moderated and farm sector displayed signs of weakness.

According to data released by the the full-year fiscal deficit target of Rs 6.24 lakh crore was breached at October-end mainly on account of lower revenue collections.

Maru further said that "focus will now shift to the RBI and OPEC meetings. The RBI is likely to keep interest rate unchanged in the policy meeting. But its guidance will be important."

Foreign funds invested Rs 293.12 crore on a net basis in the capital markets, provisional data showed Monday.

Equity benchmarks continued their rising streak for the sixth straight session Monday. The 30-share gauge ended with a marginal gain of 47 points at 36,241. Similarly, the broader NSE Nifty edged up by 7 points to 10,883.75.

The Financial Benchmark Private Ltd (FBIL) set the reference rate for the rupee/dollar at 70.0280 and for rupee/euro at 79.5887. The reference rate for rupee/British pound was fixed at 89.5005 and for rupee/100 Japanese yen at 61.69.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, December 03 2018. 17:45 IST