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Rupee Trips 14 Paise Against Dollar; Donald Trump Speech in Focus

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Mumbai: The rupee once again turned shaky against the US dollar and fell by 14 paise to close at 68.32 per dollar in the face of a bullish greenback overseas. Fresh demand for the US currency from importers and banks alongside sustained capital outflows by foreign funds weighed on the local unit even as US President-elect Donald Trump’s speech is awaited.

A spectacular run in domestic equities even failed to defend the currency’s slide, a forex dealer said. Meanwhile, the World Bank on Wednesday decelerated India’s growth for 2016-17 fiscal to a “still robust” 7 per cent from its previous estimate of 7.6 due to demonetisation impact.

The rupee opened lower at 68.25 as against previous close of 68.18 at the Interbank Foreign Exchange (Forex) market. It kept descending after a brief range-bound and hit an intra-day low of 68.3525 before ending at 68.32, showing a steep loss of 14 paise, or 0.21 per cent.

In worldwide trade, the US dollar traded little changed against major world currencies ahead of a news conference by President-elect Donald Trump as traders will look for details on his economic plans that has been expected to ramp up inflation and speed up the pace of Fed interest rate hikes.

The US dollar index was trading higher at 102.30 in late afternoon deals. The RBI fixed the reference rate for the dollar at 68.2276 and for the euro at 72.3213. In cross-currency trades, the rupee fell back against the pound sterling to settle at 82.93 from overnight level of 82.80, but recovered against the euro to end at 71.89 as compared to 72.15 earlier.

It remained weak against the Japanese Yen to finish at 58.77 per 100 yens from 58.73 on Tuesday. On the domestic equity front, the Sensex jumped 240.85 points to close at 27,140.41, while broader Nifty surged over 92 points to 8,380.65.

Meanwhile, foreign funds remained net sellers in equities and sold shares worth a net Rs 21.20 crs on Tuesday. In the forward market, premium for dollar showed a steady to firm trend owing to lack of market moving factors. The benchmark six-month premium for June was quoted steady at 149-151 paise, while the far-forward December 2017 contract inched higher to 290-292 paise from 289-291 paise on Tuesday.

Crude oil prices rallied for the first time in three days following news of Saudi supply cuts to Asia.

Source: News18