Rupee Weakens 4 Paise at 66.87 Against Rising Dollar

Mumbai: The rupee turned weaker for the second straight day against the resurgent dollar, falling by 4 paise to end at 66.87 on steady demand for the American unit.

Buoyant dollar sentiment overseas against the backdrop of heavy capital outflows amid impending Fed rate hike fears predominantly impacted the rupee sentiment, a forex dealer said.

The domestic currency opened substantially lower at 66.92 from overnight closing level of 66.83 at the Interbank Foreign Exchange (Forex) market and largely confined to narrow range- bound trade.

It hovered between 66.85 and 66.93 throughout the session, showing little impetus to convincingly break the trading range in the absence of any market moving factors before ending at 66.87, showing a loss of 4 paise, or 0.06 per cent.

In worldwide trade, the greenback traded a tad higher against all major emerging market currencies ahead of key US macro data including the highly influential US durable goods orders.

The British Pound reversed initial downtrend to trade firmly higher after preliminary Q3 Gross Domestic Product (GDP) figures showed the UK economy grew better than expected, while the euro remained near the seven-month low.

The dollar Index, which measures its broader strength against a basket of currencies, was down 0.02 per cent at 98.57 in the afternoon trade.

The RBI on Thursday fixed the reference rate for the dollar at 66.8854 and euro at 72.9385.

In cross-currency trades, the rupee fell back against the pound sterling and closed at 81.90 from 81.55 and drifted further against the euro to settle at 73.05 from 72.92.

On the contrary, the home unit recouped against the Japanese yen to finish at 63.76 from 64.09 per 100 yens earlier.

Foreign portfolio investors (FPIs) sold Indian stocks worth a net Rs 1450.65 crore on Wednesday, as per provisional data released by the stock exchanges.

Meanwhile, bourses snapped a two-day losing spree and bounced back to end on a positive note despite high volatility in view of F&O expiry.

The flagship BSE index rose 79.39 points to close at 27,915.90, while broader Nifty settled flat at 8,615.25.

In the forward market, premium for dollar remained under immense pressure due to sustained receiving by exporters.

The benchmark six-month premium for March slumped to 142-144 paise from 147.5-149.5 paise and the forward-September 2017 contract also fell sharply to 318-320 paise as compared to 323-325 paise on Wednesday.

Crude prices staged a minor-recovery attempt after a three consecutive day fall on the back of several supportive fundamental factors combined with stronger Asian demand despite unexpected drop in US crude inventories.

The Brent crude is trading above the significant USD 50/bbl mark in the European hours.