Weekly Review: Rupee suffered major setback; plunges to fresh one-month low
The resurgent rupee suffered a major setback during the week as the home currency crumbled under heightened US political instability fears and plunged to end at a fresh one-month low of 64.64 against the greenbank.
New Delhi: The resurgent rupee suffered a major setback during the week as the home currency crumbled under heightened US political instability fears and plunged to end at a fresh one-month low of 64.64 against the greenbank.
After regaining some lost ground, the home currency finally settled with a loss of 33 paise.
Emerging currency and financial markets worlwide were consumed and fraught with shaky US politics surrounding President Donald Trump and political turmoil in Brazil.
Domestic currency traders and investors took a cautious note of the latest political developments in the US after some reports suggested that President Donald Trump tried to influence federal investigation and the appointment of a special counsel to head the probe into Russia's possible involvement in last year's US elections.
The rupee largely weathered the worst after crashing below the psychological 65-mark briefly.
Strong momentum of buying in domestic equities by foreign institutional investors in the midst of country's strong economic fundamentals alongwith abundant foreign exchange reserves predominatly helped the rupee to withstand the mid-week rout, a forex trader commented.
At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed firmly higher at 64.12 a dollar from last weekend level of 64.31 and strengthened fruther to 63.95 on steady dollar unwinding from exporters and banks.
It took a knock after US political instability fears which took centre stage on Thursday's session and nosedived to hit a fresh low of 65.02 in a nervous trade amid heavy dollar demand.
However, the local unit staged a spectacular rebound towards the tailend trade to cut short losses and finished at 64.64, a fall of 33 paise, or 0.51 percent.
Foreign funds bought local shares worth USD 460.52 million, according to provisional figures by stock exchanges.
Meanwhile, the two-day meeting of the all powerful GST Council finalised four tax rates of 5, 12, 18 and 28 percent for services, including telecom, insurance, restaurants and hotels under the biggest tax reform since the Independence.
In worldwide trade, the US dollar endured its worst week in more than a year, wiping out all its gains since Donald Trump was elected US president as investors fretted that a growing White House scandal might derail Republican initiatives to boost the economy.
The dollar index a measure of the US currency against a basket of six trade-weighted peers tumbled sharply to end at a new 2017 low of 97.00 - the level not seen since October against last weekend level of 99.05.