Rupee snaps 2-day upmove, down 10 paise Vs USD on growth concerns
Mumbai: Snapping its two day gaining string, the rupee on Thursday fell by 10 paise to 54.94 against the dollar due to month-end demand for the US currency from oil importers, amid economic growth concerns and capital outflows.
Forex dealers said a weak trend in the stock markets triggered by fag-end selling also weighed on the rupee sentiment.
The rupee commenced higher at 54.75 at the Interbank Foreign Exchange (Forex) market from its previous closing of 54.84. It immediately touched a high of 54.72 on initial firm equities as well as sustained dollar selling by exporters.
Later, it fell back to a low of 54.99 before ending at 54.94, down 10 paise, or 0.18 percent. In last two sessions, it had risen by 22 paise, or 0.40 percent.
Forex experts said economic growth concerns were triggered after Prime Minister Manmohan Singh called the growth target of 8 percent in the 12th Five Year Plan "ambitious".
"The downward revisions of growth forecasts in the twelfth five year plan and comments from the Prime Minister over the sluggish growth of economy also weighed on the rupee pushing it weaker against the dollar," said Pramit Brahmbhatt, CEO, Alpari Financial Services (India).
Meanwhile, the BSE benchmark Sensex on Thursday closed down by 93.66 points at 19,323.80.
Foreign institutional investors sold stocks over Rs 132 crore on the exchanges, as per provisional BSE data.
"Despite the weakness in the dollar index and a recovery in the Euro, the rupee was not seen gaining," India Forex Advisors founder and CEO Abhishek Goenka said.
The dollar index was down by 0.23 percent against a basket of six major global currencies amid concerns over the US fiscal cliff, while New York crude oil was quoting above USD 91 a barrel in Europe on Thursday.
The premium for the forward dollar all turned negative on fresh receipts from exporters.
The benchmark six-month forward dollar premium payable in May declined to 154-156 paise from Wednesday's close of 157-1/2-159 paise.
Far-forward contracts maturing in November also softened to 297-299 paise from 301-302-1/2 paise.
The RBI has fixed the reference rate for the US dollar at 54.8465 and for euro at 72.6330.
The rupee dropped against the pound sterling to 88.95 from last close of 88.54 and also dipped to 72.85 per euro from 72.47.
It reacted downwards against the Japanese yen to 64.07 per 100 yen from previous close of 64.24.