The rupee tumbled by 30 paise on Thursday to close at a seven-week low of 44.99/45 against the U.S. currency due to renewed dollar demand from banks and importers on the back of a firm trend overseas.
At the interbank foreign exchange market, the rupee opened lower at 44.75/76 against the previous closing of 44.69/70 and dropped further to 45 before closing at 44.99/45. It hovered between 44.74 and 45 during the day.
Fresh dollar demand from banks and importers in view of the firm dollar in overseas markets as well as weak equity mainly affected the rupee value against the dollar, a forex dealer said.
In London, the dollar index rose to its highest in three weeks on Thursday as investors continued to unwind leveraged carry trades funded in the greenback and pared long bets in commodity-linked currencies.
The euro extended its losses against the U.S. dollar in New York on Wednesday as widespread strikes in Greece and more worries about Portuguese banks reduced confidence in Europe's ability to devise a solution to its sovereign debt problems.
The Reserve Bank of India has fixed the reference rate for the dollar at Rs.44.79 and for the euro at Rs.63.59.