Paring its early gains, the rupee on Tuesday closed down 3 paise at 45.37/38 against the U.S. currency due to late dollar demand amid weak equity markets.
At the Interbank Foreign Exchange (Forex) market, the rupee, in line with higher local equities, started strong at 45.17/18 a dollar from last weekend’s close of 45.34/35.
It immediately touched a high of 45.15 following the Bombay Stock Exchange benchmark Sensex, which jumped nearly 196 points in early trade. Early dollar selling by exporters and some banks on hopes of fall in dollar overseas too boosted the rupee sentiment.
However, fag—end selling pulled the Sensex to close down by about 109 points or 0.65 per cent, which put pressure on the rupee and it fell back to a low of 45.3950 before ending at 45.37/38.
Late dollar demand from importers, mainly oil refiners, too weighed heavy on the rupee.
New York crude oil was trading below USD 87 a barrel in European market on Tuesday.
Alpari Financial Services (India) CEO said, “Rupee ended slightly weak against the dollar. Local Equities closed weak.
Dollar demand from Oil importers helped the dollar trade firm against rupee.”
“The rupee closed marginally lower. The local unit showed an appreciation in the morning but could not sustain the same as the local bourses plunged on the back of weak European cues,” India Forex Advisors CEO Abhishek Goenka said.
Keywords: rupee value