Rupee at fresh 2-month low against dollar
Extending losses for the sixth straight session, the rupee on Thursday plummeted by 39 paise to hit an over 2-month low of 67.36 per dollar on persistent demand for the American currency from banks and importers amid higher greenback overseas, coupled with sharp fall in equities.
Foreign capital outflows and higher crude oil prices also affected the rupee value against the dollar
The rupee resumed lower at 67.15 per dollar as against the Wednesday's closing level of 66.97 at the Interbank Foreign Exchange and dropped further to 67.3950 before ending at fresh 2-month low at 67.36, showing a loss of 39 paise or 0.58 per cent.
The rupee had last touched 67.38 per dollar on March 15, 2016. The domestic currency has lost 80 paise or 1.20 per cent in six trading days.
Meanwhile, the RBI fixed the reference rate for the dollar at 67.2307 and euro at 75.4530.
In cross-currency trades, the rupee dropped further against the pound sterling to finish at 98.55 from 97.29 on Wednesday. However, it firmed up further against the euro to 75.49 from 75.58.
The domestic currency dropped further against the yen to 61.33 per 100 yens from 61.10 previously.
Sustained dollar demand from banks and importers in view of firm dollar in the global market mainly affected the rupee value against the dollar, a forex dealer added. The dollar stayed firm on Thursday, maintaining much of its gains made overnight on the Federal Reserve's hawkish minutes which suggested a rate increase in June.
The US currency has gained traction as the Fed's April meeting minutes suggested officials were giving serious consideration to a June interest-rate increase.
The pound rose to its highest level against the euro in more than three months after UK retail sales for April suggested concerns over the upcoming Brexit referendum may be fading.
"Weak domestic equity market, strong crude oil prices and selling from FIIs, if we sum up this entire rupee opened on a negative note and continued to trade with negative bias.
"Strong dollar was also the cause rupee to depreciate. Our benchmark index Nifty too lost considerable by 87 points and closed at 7783 levels. Thus to end the day rupee closed with massive loss of 39 paise at 67.36/USD. Trading range for the spot USD/INR pair will be 67 to 67.50/USD."
In forward market, premium for dollar dropped further on sustained receivings from exporters.
The benchmark six-month premium for October fell further to 185.5-187.5 paise from 189-191 paise on Wednesday and far forward April 2017 contract also dropped to 390.5-392.5 paise from 395-397 paise.
Meanwhile, the benchmark sensex dropped sharply by 304.89 points or 1.19 per cent to 25,399.72 on Thursday.
Crude hit fresh 2016 highs in its march towards $50 in Asia on Thursday, fanned by escalating wildfires in Canada's oil sands region and hopes of an easing in the oversupply.
