Rupee tumbles 54 paise to 3-week low on dollar demand
Mumbai: Notwithstanding smart rise in stocks, the rupee tumbled by 54 paise to end at 3-week low of 53.41 on heavy dollar demand from oil importers amid a rise in the US currency overseas on the back of robust US economic data.
At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed weak at 52.96 a dollar from previous close of 52.87 and immediately touched a high of 52.91.
Fresh dollar demand from importers, mainly oil refiners, and also some banks put pressure on the rupee.
Selling by FIIs in stocks worth Rs 69 crore further dragged the rupee as it fell to a low of 53.43.
It concluded slightly better at 53.41, showing a fall of 54 paise of 1.02 percent over Wednesday.
This is the weakest closing for the rupee since it closed at 53.51 on September 26. The rupee after closing at a recent high of 51.74 on October 4, appears to have lost steam and is seen hurtling towards 54-mark as FII inflows have slowed, said forex dealers.
"Rupee is not gaining strength despite the Dollar index trading below 80 levels and positive global stock markets...We also have a number of FCCB redemptions in October and November that will further add to the weakness. We see a possibility of rupee hitting 54 by month end," said Abhishek Goenka, Founder & CEO, India Forex Advisors.
The dollar index consisting of six major rivals was up by 0.09 percent in Europe today.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said," The rupee weakened sharply on oil importers demand who were on sidelines expecting the unit to strengthen further while delaying their payments. The recovery from lows in equity indices also helped it cement gains and rupee closed just below the day's high."
Meanwhile, festive spirits sparked strong buying in consumer durables banks, auto and realty stocks, helping the benchmark Sensex post a robust 181-point gain today to close at one-week high of 18,791.93.
In global currency market, the US dollar traded with small gains versus major rivals amid slowing selling pressure. Confidence was also lifted by more upbeat US housing data.
Earlier on Thursday, data showed China's economy cooled in the third quarter -- posting its slowest pace of growth since first quarter of 2009.
European stock markets mostly were weak and the euro dipped versus the US dollar before a key EU summit.
Meanwhile, the premium for the forward dollar remained bearish on continued receipts by exporters.
The benchmark six-month forward dollar premium payable in March dipped to 141-143 paise from Wednesday's close of 146-1/2- 148-1/2 paise.
The premium for far-forward contracts maturing in September also dropped to 284-286 paise from 290-1/2-292-1/2 paise.
The RBI has fixed the reference rate for the US dollar at 52.9690 and for euro at 69.4560.
The rupee plunged further against the pound sterling to 86.12 from previous close of 85.49 and also slumped to 69.96 per euro from 69.39.
It also declined against the Japanese yen to 67.32 per 100 yen from last close of 67.23.