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Weekly Review: Rupee suffers 4th-straight weekly loss, settles down at 65.38 vs USD

The home currency briefly scaled back the significant 64-mark before retreating.

Weekly Review: Rupee suffers 4th-straight weekly loss, settles down at 65.38 vs USD

New Delhi: The rupee continued to lose ground against the American currency for the fourth-straight week in an extremely volatile trade weighed by consistent dollar demand from banks and importers amid impending US rate hike angst.

After enduring a roller-coaster ride, it ultimately settled down at 65.38, revealing a nominal loss of 10 paise.

The home currency briefly scaled back the significant 64-mark before retreating.

The local forex trading sentiment remained little shaky in the midst of continued capital outflow concerns amid uncertainty over the Fed decision to start unwinding of its monetary stimulus and gradually raise U.S. Interest rates.

Besides highly bullish dollar overseas undertone, increased demand for the American unit from corporates and foreign banks largely contributed to the rupee's weakness despite persistent rise in equity market.

Foreign investors continued to be in exit mode and pulled out over Rs 11,000 crore from Indian equities in September against the back drop of heightened geo-political worries amid concerns over corporate earnings growth.

However, promising prospect of an economic recovery following rebound in core sector growth which rose to a five-month high of 4.9 percent in August also supported by robust manufacturing PMI data, triggered some late recovery and capped rupee's steep fall.

Meanwhile, the Reserve Bank kept interest rate unchanged as was widely expected in view of upward trend in inflation.

At the Interbank Foreign Exchange (Forex) market, the local currency resumed with a big gap down at 65.65 against last weekend close of 65.28 on heavy bouts of dollar demand and traded with intense volatility.

But, reversing its weakening trend, rupee made a strong comeback during the mid-week trade to hit a high of 64.95 before drifting back to end at 65.38, showing a modest loss of 10 paise, or 0.15 percent.

The rupee has depreciated by a steep 160 paise, or 2.51 percent in four-straight weeks.

Forex market was shut on Monday for Gandhi Jayanti.

On the global front, the US dollar trimmed gains against other major counterparts on Friday, but remained within close distance of a 10-week high after data showed that the U.S. Unemployment rate declined and wages rose more than anticipated last month, although employment unexpectedly fell.

With PTI Inputs