The rupee on Thursday tumbled by 29 paise against the U.S. currency to close at more-than-one-month low of 44.76/77, following distinctly weak equities amid increased capital outflows.
Fresh dollar demand from importers, too, weighed on the rupee sentiment, a forex dealer said.
“Globally, dollar weakened against the major currencies like euro, yen and local equities also traded weak which depreciated rupee by more than half a per cent. The levels to watch out for rupee would be 45,” Alpari Forex (India) CEO Pramit Brahmbhatt said.
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“The trading range for the USD/INR will be between 44.50-45.00 tomorrow,” he added.
At the Interbank Foreign Exchange, rupee started lower at 44.58/59 per dollar as against the overnight closing level of 44.47/48 but rebounded to the day’s high of 44.47, in line with early recovery in local stocks.
However, an emergence of selling pulled the Indian benchmark Sensex to close down by nearly 259 points, or 1.40 per cent, to 18,210.58, registering one of the worst losing streak of nine days in a decade, which pushed the rupee down to settle at 44.76/77, a steep fall of 0.65 per cent.
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Foreign institutional investors (FIIs) pulled out $439.30 million in two days on May 3 and 4.
Meanwhile, food inflation declined to 8.53 per cent for the week ended April 23 from 8.76 per cent in last week.
The rupee premium for the forward dollar finished sharply lower on fresh receivings by exporters. The benchmark six-month forward dollar premium payable in October concluded weak at 147-149 paise from Wednesday’s close of 158-159-1/2 paise.
Far-forward contracts maturing in April settled subdued at 298-300 paise from 317-319 paise in the previous session.
The RBI has fixed the reference rate for the dollar at Rs. 44.57 and the euro at Rs. 66.23.
The rupee declined further against the pound sterling to end at Rs. 73.80/82 from Wednesday’s close of Rs. 73.46/48 and remained weak against the euro to close at Rs. 66.41/43 from Rs. 66.05/07.
It, however, plunged against the Japanese yen to Rs. 56.08/10 per 100 yen from last close of Rs. 54.85/87.