Rupee breaches 67-mark against US dollar, ends 10 paise lower at 66.97

Mumbai: The rupee continued its free fall against the US dollar for the fifth straight session Wednesday and touched the 67-level after a gap of two months, but closed 10 paise lower at 66.97 on sustained demand for the greenback from banks and importers amid fall in domestic equities.

Higher dollar in the overseas market coupled with foreign capital outflows also affected the market sentiment.

The rupee resumed lower at 66.95 as against the yesterday's closing level of 66.87 per dollar at the Interbank Foreign Exchange (Forex) Market and dropped further to 67.00 level after two months before ending at 66.97, showing a loss of 10 paise or 0.15 per cent.

The rupee has lost 41 paise or 0.62 per cent in the last five trading sessions.

The domestic currency had last touched 67-level on March 16 this year when it had slumped to 67.22.

It moved in a range of 66.86 and 67.00 per dollar during the day.

The dollar index was up by 0.16 per cent in the late global trade against a basket of six global currencies.

Meanwhile, the RBI fixed the reference rate for the dollar at 66.9131 and euro at 75.4847.

In cross-currency trades, the rupee dropped further against the pound sterling to finish at 97.29 from 96.81 yesterday.

However, it recovered against the euro to 75.58 from 75.70.

The domestic currency declined against the yen to 61.10 per 100 yens from 61.07 previously.

International Brent crude remains near the USD 50 a barrel mark after a multi-week rally as outages in Africa and Canada and production declines outside of the Middle East region fuelled expectations of a tighter supply.

A stronger dollar ahead of the release of the latest minutes from the US Federal Reserve pushed oil prices down today. The Wall Street Journal Dollar Index, which tracks the greenback against a basket of other currencies, rose 0.4 per cent. As oil is priced in dollars, it becomes more expensive for holders of other currencies as the dollar appreciates.

Foreign Portfolio Investors (FPIs) and Foreign Institutional Investors (FIIs) sold shares worth a net Rs 250.70 crore today as per the provisional figures issued by stock exchanges.

Pramit Brahmbhatt of Veracity Financial Services said, "The rupee opened on a negative note continuing move of previous trading session and strong crude oil prices put pressure on the rupee, thus by depreciating it.

"Negative cues from domestic equity market extended loss in the rupee. Our domestic equity market closed with a loss of 20 points at 7,870 levels. Thus to end the session, the rupee closed with a loss of 10 paise 66.97/USD. Trading range for the spot USD/INR pair will be 66.80 to 67.10/USD."

In forward market, premium for dollar eased further on persistent receivings from exporters.

The benchmark six-month premium for October moved down further to 189-191 paise from 191-193 paise yesterday while far forward April 2017 contract closed unchanged at 395-397 paise.