Business Market 08 Nov 2017 Rupee halts 2-day sl ...

Rupee halts 2-day slide, up 7 paise at 64.96 vs USD

PTI
Published Nov 8, 2017, 7:45 pm IST
Updated Nov 8, 2017, 7:45 pm IST
Rupee is trading at 64.96 against the US currency on fresh bouts of dollar selling by banks and exporters.
The RBI, meanwhile, fixed the reference rate for the dollar at 65.0592 and for the euro at 75.3841. (Photo: PTI).
 The RBI, meanwhile, fixed the reference rate for the dollar at 65.0592 and for the euro at 75.3841. (Photo: PTI).

Mumbai: The rupee today staged a mild recovery after a two-session fall and ended higher by 7 paise at 64.96 against the US currency on fresh bouts of dollar selling by banks and exporters even as domestic equities continued to decline.

Excess volatility and movements of the US dollar in global trade largely weighed on trade during the day, though the home currency largely withstood the initial uneasy momentum.

 

Sustained capital inflows into equities and debts predominantly weighed on trading sentiment.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 461.47 crore on Tuesday.

The home currency plunged to fresh 1-week low on Tuesday on fears of oil price shock.

Surging crude prices could hurt fiscal deficit target of the government for the current year and spur market concerns over the nation's inflation outlook.

The deficit target for the current year has been kept at 3.2 per cent of GDP.

India is the second-largest crude oil consumer in Asia after China.

Most Asian currencies were mixed in the midst of growing uncertainties about the US tax reform plan and swelling crude prices.

In the meantime, Brent crude oil slipped back in Asian trading after an OPEC report forecast weaker demand growth for its crude than previously expected alongside an increase in supply from its competitors.

The benchmark Brent crude is trading at USD 63.38 a barrel, down 0.49 per cent.

Meanwhile, local equities continued to wilt under immense selling pressure for the second straight session as investors booked profits in frontline counters and also rattled by political upheaval in Saudi Arabia.

The rupee resumed lower at 65.13 against Tuesday's close of 65.03 at the Interbank Foreign Exchange (FOREX) due to consistent dollar demand from foreign banks and drifted further to 65.17 in early trade.

However, overcoming initial volatility the local unit made a smart recovery in mid-afternoon deals to hit a high of 64.9250 before ending at 64.96, showing a gain of 7 paise, or 0.11 per cent.

The local units had depreciated by a whopping 48 paise in last two days.

The RBI, meanwhile, fixed the reference rate for the dollar at 65.0592 and for the euro at 75.3841.

On the global front, the greenback held steady against other major counterparts amid fresh concerns over an upcoming US tax overhaul also hit by reports that a key corporate tax cut currently under discussion in US tax reforms plans could be delayed for one year.

The dollar index, which measures the greenback's value against a basket of six major currencies, was down at 94.78 in early trade.

In cross-currency trades, the rupee bounced back against the Pound sterling to finish at 85.28 from 85.46 per pound, but remained weak against the Japanese yen to end at 57.21 per 100 yens from 57.00 yesterday.

It also declined further against the euro to close at 75.35 from 75.17 earlier.

Elsewhere, the euro is trading little changed against the greenback after testing a fresh 4-month low overnight.

The pound sterling weakened further after the political scandal and Brexit talks weighing on the currency.

In forward market today, premium for dollar declined owing to mild receiving from exporters.

The benchmark six-month premium payable in April moved down 135-137 paise to 137-139 paise and the far forward October 2018 contract edged down to 275-277 paise from 277-279 paise previously.

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