Mumbai: After a brief recovery, the rupee once again turned weaker against the US currency and lost 11 paise to close at 64.52 on fresh bouts of dollar demand from importers amid continued geo-political headwinds.
Headline-driven volatility and nervousness due to the ongoing tensions between US and North Korea predominantly kept forex market sentiment shaky despite subdued dollar overseas.
Sluggish domestic equities also weighed on trade, though smooth supply of dollars due to persistent capital inflows into equities and debts largely cushioned the fall. In the meantime, foreign investors pumped in a whopping Rs 16,500 crore in the Indian capital markets this month so far on the back of improved investor sentiment and growth in the manufacturing sector.
The greenback remained under immense pressure and fell alongside benchmark US treasury bond yields as geopolitical unrest and worries about slowing economic growth following the release of lower US retail sales and consumer prices data cooled Fed interest rate hike expectations.
After a flat opening at 64.42 against last Thursday's closing value of 64.41, the home unit quickly regained strength to hit a fresh intra-day high of 64.29 stimulated by a weaker dollar.
However, the rupee relinquished its strong initial gains and retreated sharply to hit a low of 64.53 in late afternoon deals before ending at 64.52 at the Interbank Foreign Exchange (forex) market, showing a loss of 11 paise, or 0.17 percent. It had settled higher by 26 paise on Thursday.
The RBI, meanwhile, fixed the reference rate for the dollar at 64.4053 and for the euro at 68.4049. In worldwide trade, the dollar dipped to a five-month low against the yen on Monday.
The dollar index, which tracks the US currency against a basket of six major rivals, was trading lower by 0.39 percent to 100.10.
In cross-currency trade, the Indian unit fell back against the pound sterling and finished at 80.93 from 80.71 per pound and also lost ground against the euro to settle at 68.61 compared to 68.47 earlier.
It continued to trade weak against the Japanese Yen to conclude at 59.54 per 100 yens from 59.02.
Meanwhile, country's export growth touched an over five-year high of 27.6 per cent in March on account of better performance of petroleum and engineering sector, though the expansion during 2016-17 stood at only 4.7 percent. But, the forex kitty slumped by USD 956.4 million to USD 368.998 billion for the week ended April 7 due to fall in foreign currency assets.
On the equity front, the flagship Sensex declined by 47.79 points to end at 29,413.66, while broader Nifty was down 11.50 points to settle at 9,139.30.
In the forward market today, premium for dollar declined due to sustained receivings from exporters.
The benchmark six-month premium for September moved down to 148-150 paise as against 150-152 paise and the far-forward March 2018 edged down to 306-308 paise from 308-310 paise previously.
On the global commodity front, crude prices fell back on signs that the United States is continuing to add output, largely counteracting strong economic growth in China and OPEC efforts to cut production.
The benchmark Brent crude futures were down 53 cents at USD 55.36.
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