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10 Dec 2018, 23:11 HRS IST
  • PTI
  • Rupee widens losses, slips to near 2-wk low of 64.57

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18:58 HRS IST

Mumbai, Dec 7 (PTI) The rupee lost further ground to end at a near two-week low of 64.57 against the US currency, falling by 5 paise on sustained demand for the dollar from importers despite a strong rebound in equities.

Buoyant dollar overseas alongside continued withdrawal of funds by foreign portfolio investors (FPIs) in the wake of impending Fed rate hike largely kept currency market highly volatile.

Despite a firm start, the domestic currency showed signs of fatigue and succumbed to late sell-offs.

A spectacular rebound in domestic equities and falling crude prices even failed to arrest the rupee slide.

In early trade, the rupee resumed firm at 64.46 from Wednesday's close of 64.52 at the Interbank Foreign Exchange (forex) market on bouts of dollar selling by exporters.

But, it immediately surrendered its early strong gains and traded in a very tight range of 64.50 and 64.61 most part of the day before concluding at 64.57, showing a loss of 5 paise, or 0.08 per cent.

The rupee had lost 14 paise to end at 64.52 against the US dollar on Wednesday after RBI decided to keep the key policy rates unchanged.

Marking its third straight fall on Thursday, the domestic currency lost 20 paise against the dollar in past three sessions.

The RBI, meanwhile, fixed the reference rate for the dollar at 64.5388 and for the euro at 76.0848.

Foreign portfolio investors (FPIs) sold shares worth a a net Rs 1,217.92 crore on Wednesday.

In the meantime, surprising US stock-builds weighed on oil prices, sending the front-month WTI and Brent crude oil contracts sharply down by nearly 3 per cent overnight.

Brent crude, an international benchmark, is currently trading at USD 61.64 a barrel in Asian trade.

Meanwhile, local bourses staged a sound recovery from their recent global risk-off correction on the back of smart buying at existing lower levels along with some short-covering bounce in beaten down counters a day after RBI kept key policy rates unchanged.

The flagship Sensex jumped over 352 points to close at 32,949.21, while Nifty surged 123 points to 10,166.70.

On the global front, the dollar held onto gains against other major counterparts as investors continued to focus on US tax reform discussions amid hopes the bill will be passed before Christmas.

The greenback found support after US Senate Republicans agreed to talks with the House of Representatives on a major tax reform bill on Wednesday.

The dollar index, which measures the greenback's value against a basket of six major currencies, was up at 93.74 in early trade.

In cross-currency trades, the rupee fell back against the pound sterling to settle at 86.36 from 86.31 per pound, but strengthened further against the euro to end at 76.08 from 76.24.

The home unit also rebounded against the Japanese yen to finish at 57.28 per 100 yens as compared to 57.51 earlier.

Elsewhere, the common currency remained under pressure against the US dollar despite figures confirming robust third quarter Eurozone growth.

Pound sterling, however, regained some lost ground to trade higher, though Brexit-related news ahead of the EU Summit next week continued to dominate the market.

In forward market on Thursday, premium for dollar showed further weakness due to sustained receiving from exporters.

The benchmark six-month premium payable in May declined to 133-135 paise from 137-139 paise and the far forward October 2018 contract also drifted to 271-273 paise from 275- 277 paise on Wednesday.

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