Rupee hits 3-week low of 65.31 against US dollar, tumbles 38 paise

Mumbai: The rupee Thursday slumped by 38 paise to close at more than 3-week low of 65.31 against the American currency on month-end dollar demand from importers and some banks in view of firm greenback overseas.

The rupee resumed lower at 65.15 per dollar as against the last closing level of 64.93 at the Interbank Foreign Exchange Market and dropped further to 65.31 before finishing at more than 3-week low of 65.31, showing a loss of 38 paise of 0.59 percent.

The rupee had last ended at 65.41 per dollar on October 6, 2015.

It hovered in a range of 65.12 and 65.31 per dollar during the day.

The yen strengthened against its rival currencies in late Asian trade today, as investors bought the Japanese currency after unexpectedly strong industrial output data lowered expectations for an extra monetary easing measures from the Bank of Japan.

However, in the overseas market yesterday, the US dollar soared after Federal Reserve policy makers left the door open for an interest-rate hike in December.

The Federal Open Market Committee said it would "assess progress ? both realised and expected ? toward its objectives of maximum employment and 2 percent inflation" at their next meeting, which ends December 16, adding that it would keep an eye on "global economic and financial developments."

Meanwhile, the Indian benchmark senses dropped further by 201.62 points or 0.75 percent to close at 26,838.14.

Pramit Brahmbhatt, Veracity Group CEO, said, "The rupee traded low today taking cues from weak local equities which closed down by over half percent for the day".

The rupee depreciated over half percent for the day to close at 65.31. Global equities traded weak as the Fed officials indicated that US Interest rate hike may take place this year which would open new options for the investors to invest their funds.

The trading range for the Spot USD/INR pair is expected to be within 64.80 to 65.80.

In forward market today, premium for dollar dropped on fresh receivings from exporters.

The benchmark six-month premium payable in March fell to 174-175.75 paise from 179-181 paise yesterday and far forward Sept 2016 contract also dropped to 390-391.5 paise from 396-398 paise.

The RBI fixed the reference rate for the dollar at 65.1515 and for the euro at 71.2497.

The rupee fell against the pound sterling to finish at 99.65 from 99.27 previously while moved up against the euro to 71.63 from 71.88.

The domestic currency ended lower against the Japanese currency at 53.99 per 100 yen from 53.94.