Rupee skids from 3-wk high to 64.70, down 12 paise

Retreating from a three-week high, the rupee today depreciated by 12 paise to close at 64.70 a dollar due to renewed demand for the US currency.

A sharp uptick in the US dollar demand from importers and banks amid rising prospect of Fed rate hike by the end of this year largely dominated trading sentiments.

Though, the American currency remained under pressure due to Federal Reserve inflation concern going ahead and also some caution ahead of the US manufacturing data release later in the day.

Suspected RBI intervention to iron out excessive volatility also weighed on trade.

The Indian unit had ended at a fresh three-week high of 64.58 yesterday.

Moreover, surging crude prices ahead of the much awaited OPEC meet also impacted overall currency market mood, a forex dealer commented.

Brent crude was trading higher at USD 63.48 a barrel in early Asian trade.

In the meantime, the stocks market rally remained unabated for the seventh straight day following good buying support in key consumer durables and IT counters.

Most Asian bourses were mixed against the backdrop of Thursday’s intense blue-chip selloff in Chinese markets.

At the Interbank Foreign Exchange (forex) market, the rupee opened virtually flat at 64.58, but soon bounced back to hit an intra-day high of 64.54 on sustained dollar unwinding.

However, the recovery momentum short-lived as the local unit succumbed to bouts of volatility and kept on grinding lower following sudden dollar demand.

It touched a low of 64.75 in late afternoon deals before concluding at 64.70, showing a loss of 12 paise, or 0.19 per cent.

On weekly basis, the rupee strengthened by a whopping 31 paise against the dollar.

The RBI, meanwhile, fixed the reference rate for the dollar at 64.7328 and for the euro at 76.7213.

In cross-currency trades, the rupee dropped further against the pound sterling to finish at 86.13 from 85.96 per pound and also remained subdued against the euro to settle at 76.73 from 76.51.

The domestic currency, however, regained some ground against the Japanese yen to conclude at 58.03 per 100 yens from 58.13.

The dollar index, which measures the greenback’s value against a basket of six major currencies, was down at 92.95 in early trade.

Elsewhere, the common currency euro rallied to a fresh six-week high against the US dollar following the release of the German IFO survey which showed that business sentiment continues to improve.

Pound Sterling, however, traded little changed despite overnight robust GDP data as sentiment remained shaky due to overall nervousness surrounding the Brexit negotiations.

In forward market today, premium for dollar displayed a mixed trend owing to lack of market moving factors.

The benchmark six-month premium payable in April was steady at 117-119 paise, while the far-forward October 2018 contract softened to 256-258 paise from 257-259 paise earlier.

On the international energy front, oil prices jumped to a two-year high on Friday as North American markets tightened on the partial closure of the Keystone pipeline connecting Canadian oilfields with the United States.

US light crude hit highs not seen since July 1, 2015, on Friday, trading up 1.38 per cent to USD 58.81 per barrel.

Trading activity was expected to be low on Friday due to the US Thanksgiving holiday.

Benchmark Brent crude traded up 0.3 per cent at USD 63.74 a barrel, after spending much of the Asia trading session in negative territory.

 

 

Source: PTI

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