Rupee Falls To 1-Week Low Against US Dollar: 5 Things To Know
Continued its downward movement against the US dollar today, the rupee weakened by 11 paise to close at 68.24 against the greenback. Increased demand for the American currency put pressure on the rupee, according to market observers. At 68.24, the rupee registered a new one-week low against the US dollar, news agency Press Trust of India (PTI) reported. A marked increase in month-end dollar demand from corporates and importers along with sluggish domestic equities predominantly weighed on the trading front, the agency noted. Steady capital outflows and a marginal rise in crude prices also added some pressure.
Here are the key things about movement in the rupee against the US dollar:
1. Crude oil prices took support from production losses in Canada, Libya and from the Neutral Zone between Saudi Arabia and Kuwait, but under pressure from higher supply from elsewhere in OPEC (Organization of the Petroleum Exporting Countries) and escalating trade conflicts, according to news agency Reuters. Brent crude was near $75.20 a barrel in recent trade.
2. Mid-morning recovery in the currency was short lived as rupee succumbed to fresh selling pressure and retreated sharply to touch a session low of 68.26, before ending at 68.24.
3. Foreign investors pulled out Rs 538.40 crore from equity markets today, provisional exchange data showed. On Monday, the rupee had weakened by 29 paise to close at 68.13 against the US dollar, halting a three-day run.
4. Meanwhile, sluggish activity in the equity markets failed to support the currency. "The Nifty passed the litmus test of not breaking the 10,700 mark and closing well off the Lows. It closed 37 points higher from the day's low. Nifty's gains canes amidst widespread losses in Asia. Having said that, the markets are still in a range," said VK Sharma, head-private client group & capital markets strategy, HDFC Securities.
5. The Reserve Bank of India (RBI) fixed the reference rate for the dollar at 68.1676.
(With agency Inputs)
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