Rupee wipes out 3-day gains, tumbles 25 paise
Reversing its three-day upsurge, the rupee today crumbled against the US dollar and ended lower by 25 paise at 65.14 on fresh bouts of demand for the American currency from importers and banks amid rising uncertainty stemming from Trump's possible trade war.
By : migrator
Update: 2018-03-08 14:48 GMT
Mumbai
Overall forex market sentiment was dominated by hardening of speculation over the Federal Reserve's monetary policy path and well supported by dollar rebound.
Fresh capital outflows also kept forex traders highly nervous despite a relief rally in local equities.
Foreign portfolio investors sold shares worth a net Rs 719.78 crore yesterday.
Growing concern that the ongoing trade turmoil could trigger a prolonged wave of retaliatory levies and derail the worldwide economic expansion too weighed on the rupee front, a forex dealer said.
The Indian unit had appreciated by a whopping 28 paise against the dollar in three-day rally.
Most emerging market currencies also witnessed fresh selling amid surging trade uncertainties after Donald Trump said Canada and Mexico would be excluded from the tariffs, provided that the three countries succeed in reaching a new NAFTA agreement.
The rupee opened a tad lower at 64.90 compared to Wednesday's close of 64.89 at the inter-bank foreign exchange market (forex).
It remained under immense pressure throughout the day due to renewed dollar demand from banks and corporates.
The local unit touched an intra-day low of 65.15 in tail-end trade before ending at 65.14, revealing a steep loss of 25 paise, 0.39 per cent.
The RBI, meanwhile fixed the reference rate for the dollar at 64.9212 and for the euro at 80.5412.
On the international energy front, global crude prices slipped for the second time in a row against a backdrop of rising US crude production and an increase in inventories.
Brent crude futures were trading at USD 64.21 a barrel in early Asian trading.
Meanwhile, reversing an uninterrupted six-day losing spell, domestic bourses staged a spirited rebound from their multi-month lows, as participants went for value-buying in beaten-down counters and also encouraged by a relief rally across global markets.
The benchmark BSE Sensex shot up over 318 points to end at 33,351.57, while Nifty rose 89 points at 10,242.65.
Globally, the US dollar traded firmly higher against its major rivals amid fading trade tensions, though US President Donald Trump is scheduled to sign the trade tariffs imposing bill later in the day.
The dollar index, which measures the greenback's value against a basket of six major currencies, was up at 89.78 in early trade.
In cross-currency trades, the rupee fell back against the pound sterling to finish at 90.32 per pound from 89.96 but bounced back against the euro to settle at 80.58 from 80.63 earlier.
The local unit also bounced back against the Japanese yen to close at 61.38 per yens from 61.44 yesterday.
Elsewhere, the common currency euro retreated from its overnight 2-1/2 week high against the greenback with investors awaiting commentary from the ECB and policy decision later in the day on Thursday before the Bank of Japan concludes its policy meeting Friday.
The British pound, however, traded little changed in the absence of any significant UK events even the dollar gained ground.
In forward market today, premium for dollar displayed steady to firm trend.
The benchmark six-month forward premium payable in August ended steady at 125-127 paise, while the fag-forward February 2019 contract edged up to 245.50-247.50 paise from 243-245 paise previously.
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