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Rupee logs 1st fall in three days, down 5 paise at 68.68 a dollar

Press Trust of India  |  Mumbai 

Snapping its two-day rally, the today ended lower by 5 paise at 68.68 against the US on renewed buying interest for the American even as domestic equities remained in a triumphant mode.

Escalating trade war and sanctions dominated headlines and continued to play a critical role in driving the forex market sentiment after the US imposed fresh tariffs on imported goods from and sanctions against several other nations.

The Indian had appreciated by a whopping 25 paise in the last two days.

Tail-end demand from banks and importers largely offset early steep gains from and a recovery in the Chinese yuan.

The home touched a fresh one-week high of 68.45 in mid-morning deals before retreating.

Emerging markets currencies also witnessed turmoil.

The Chinese yuan was trading higher at 6.83 against the after data showed China's consumer inflation index rose by 2.1 per cent in July.

Meanwhile, equity benchmarks Sensex and Nifty ended at fresh life-time highs for yet another session today, powered by unabated buying by participants on stellar corporate earnings.

On the energy front, crude prices regained some lost ground, paring some of their overnight steep losses, after the first round of US sanctions against came into effect, although confidence in crude demand has been hit by the escalating China-US trade dispute.

The Benchmark brent for September settlement is trading weak at USD 72.42 a barrel in early Asian session after having dropped by more than 3 per cent on Wednesday.

Earlier, the resumed with a gap-up at 68.48 from Wednesday's close of 68.63 at the Foreign Exchange (forex) market on steady dollar selling by exporters.

It later hit a session high of 68.45 in mid-morning deals before eventually pulled back to a low of 68.71 before finally settling the day at 68.68, showing a modest loss of 5 paise, or 0.07 per cent.

The (FBIL), meanwhile, fixed the reference rate for the dollar at 68.6240 and for the euro at 79.6327.

The bond markets, however rallied for the second day and the 10-year benchmark bond yield slipped to 7.75 per cent.

Globally, the US dollar gained against most currencies as investors bet that trade war rhetoric and a strong U.S. would continue to aid the currency.

Trade tensions are seen as beneficial for the US dollar as the is better placed to handle protectionism than emerging markets, and tariffs may narrow the US trade deficit.

Against a basket of other currencies, the dollar index is trading higher at 95.05.

In the cross currency trade, the fell back against the pound sterling to end at 88.53 per pound from 89.30 and the euro drifted against the euro to finish at 79.61 as compared to 79.58 yesterday.

The Japanese yen also closed soft at 61.81 per 100 yens from 61.80 earlier.

Elsewhere, the pound sterling is trading little changed against the US dollar after reports of EU preparing Brexit concessions to the UK Theresa May, helping the currency to recover from a no-deal Brexit selloff ahead of Friday's Q2 GDP data.

The euro remained under immense selling pressure against the greenback amid dovish report on the stating that the potential US tariffs may put them at the highest level in 50 years against the grim back drop of ongoing US-war tension.

The Russia's ruble is tanking on the of fresh US sanctions over Moscow's alleged poisoning of an ex-in Britain.

In forward market today, premium for dollar declined owing to consistent receiving from exporters.

The benchmark six-month forward premium payable in December moved down to 114-116 paise from 116-118 paise and the far-forward June 2019 contract edged down to 262-264 paise from 264.50-266.50 paise previously.

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

First Published: Thu, August 09 2018. 18:55 IST
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