Rupee falls 37 paise to one-week low of 55.84 as demand for dollar rises

The rupee fell by 37 paise to close at one-week low of 55.84 against the US currency following fresh dollar demand from importers and banks in the wake of US Fed announcing no new steps to tide over economic crisis.

Dealers said there was sudden spurt of demand for the US currency in the fag-end of trade as investors speculated that there would no special measure by ECB either.

At Interbank Foreign Exchange (Forex) market, rupee opened weak at 55.75 from yesterday’s close of 55.47. The dollar gained strength after the US Fed yesterday did not announce any new measures to boost its sagging economy, traders said.

There was some support from FIIs also who pumped in Rs 140 crore in local stocks as per provisional data. But the rupee again fell back after mid-session to a low of 55.90 on renewed dollar demand from importers.

It finally concluded at 55.84, a fall of 0.67 per cent or 37 paise.

“Rupee weakened today in line with Euro weakening against dollar. The domestic currency is likely to be range bound tomorrow unless some visible trigger comes to give further directions,” said B S Keshava Murthy, General Manager (Treasury), Indian Overseas Bank.

As the Indian forex markets closed, European Central Bank kept its benchmark interest rate unchanged at 0.75 per cent.

Hopes of any new measures were muted from ECB President Mario Draghi, who was expected to speak at a conference later.

“Rupee continued its weakening spree after breaching the low of last four sessions in the last hour today. The dollar index retreated from day’s high and was trading lower, pressurising the rupee,” said Pramit Brahmbhatt, CEO, Alpari Financial Services (India).