The rupee today retreated from two-month high levels due to a strong dollar globally and capital outflows, tumbling by 20 paise to close at 66.63 against the US currency.
A smart rebound in the US dollar in overseas markets post US presidential poll results and sustained capital outflows from debt and equity markets hit the rupee sentiment, a forex dealer said.
Though the domestic unit resumed on firm footing, with the currency hitting a fresh two-month high of 66.3350 on initial dollar unwinding by speculative traders amid a rally in local stocks.
But, later the rupee fell back to hit a session low of 66.65 due to frantic buying by importers and corporates. It concluded at 66.63, showing a sharp loss of 20 paise, or 0.30 per cent. It had ended at a two month high of 66.43 yesterday.
Heavy offloading by foreign portfolio investors (FPIs) also weighed on trade as they sold shares worth Rs 2,095 crore yesterday. FPIs sold shares worth Rs 733 crore today, provisional bourses data showed.
A spectacular rally in domestic stocks alongside fading Fed rate hike prospects even failed to arrest the fall, a forex trader said.
On the global front, after an initial wobble the American currency rebounded sharply to its highest level in two weeks and continued its surge aftermath of the US presidential election jitters, an analyst said.
The dollar index was quoted higher 0.31 per cent at 98.97 in the afternoon trade.
Meanwhile, the RBI today fixed the reference rate for the dollar at 66.42 and euro at 72.7113.
Meanwhile, domestic equities finished marginally higher
after erasing early strong gains on the back hectic profit-taking as investors turned cautious ahead of the poll verdict of assembly elections in five states tomorrow.
The benchmark Sensex advanced by 17.10 points to close at 28,946.23, while Nifty added 7.55 points to 8,934.55.
In the forward market, premium for dollar displayed a steady trend owing to lack of market moving factors.
The benchmark six-month premium for August and the far-forward February 2018 contract ended steady at 146-148 paise and 298-300 paise, respectively.
