Rupee hits 2-week closing low of 66.58 against US dollar

Mumbai: The rupee surrendered its morning gains and ended lower by 4 paise at the close, hitting 2-week low of 66.58 on fag-end dollar demand from banks and importers amid higher greenback in the global markets, despite a sharp recovery in domestic equities.

The domestic unit opened slightly higher at Rs 66.52 as against last Friday's closing level of Rs 66.54 at the Interbank Foreign Exchange market and firmed up further to 66.39 on initial selling of dollars by banks and exporters.

However, it washed out initial gains and fell to 66.5950 on fag-end dollar demand from banks and importers before concluding at 2-week closing low of 66.58, showing a loss of 4 paise or 0.06 percent.

The rupee had last ended at 66.62 per dollar on April 25, 2016.

It hovered in a range of 66.39 and 66.59 per dollar during the day.

Meanwhile, the dollar index was down by 0.06 percent in the early morning trade while it recovered in the late afternoon trade to 0.09 percent against a basket of six global currencies.

The RBI fixed the reference rate for the dollar at 66.4379 and euro at 75.8056.

In cross-currency trades, the rupee recovered against the pound sterling to finish at 96.09 from its last weekend's level of 96.44.

It also firmed up to 75.81 against the euro from 76.00.

The domestic currency also recouped against the yen to 61.44 per 100 yens from 62.22. 

In overseas market, the US dollar was mostly higher

against its major rivals in the late Asian trade against other major currencies after US data on last Friday showed a continued expansion of the labour market and rising wage inflation.

US non-farm payrolls rose by a seasonally adjusted 1,60,000 jobs in April, undershooting a 2,05,000 increase expected, but average hourly earnings of private-sector workers advanced 2.5 percent in April from a year earlier.

Pramit Brahmbhatt of Veracity Financial Services said, "The rupee opened at 66.52 with a gain compared to previous close at 66.54/USD.

"Taking cues from domestic equity market, where we witnessed Nifty gaining 133 points, the rupee too appreciated and extended its gain further. But late buying interest in dollar forced the rupee to depreciate and thus to end the day, the rupee closed with mere loss of 4 paise at 66.58/USD.

In forward market, premium for dollar moved down further on mild receivings from exporters.

The benchmark six-month premium for October moved down further to 200-202 paise from the last Friday's level of 202-204 paise and far forward April 2017 contract also fell further to 396-398 paise from 399-401 paise.

Meanwhile, the benchmark Sensex recovered sharply by 460.36 points or 1.82 percent to close at 25,688.86.

Crude prices extended gains in Asia today as raging wildfires hit production in Canada, while traders digested news that Saudi Arabia had replaced its oil minister.

US benchmark West Texas Intermediate for June delivery was up 75 cents at USD 45.41 a barrel while North Sea Brent was up 51 cents at USD 45.77.