The rupee on Tuesday fell 30 paise to 55.41 against the US dollar, its lowest level in six months, due to sustained dollar demand from importers and weak local equities, extending losses for the third straight session. This would make hotel accommodation, air tickets and visa charges costlier for overseas travellers who go on holidays or for studies.
“The strength in US dollar is largely attributed to upswing in the dollar index as the market waits for minutes from the Federal Reserve's meeting. The Fed may hint at tapering off its bond buying program later this year and the concerns are fuelling a rally in dollars,” said Sugandha Sachdeva, assistant vice-president, Religare Securities. “Further, adding to the rupee weakness was the profit-booking witnessed in equity markets.”
The rupee resumed higher at 54.97 per dollar from its previous close of 55.11 on the Interbank Foreign Exchange market. It touched a high of 54.80 at initial stages on early rally in equities but fell back later to a low of 55.42 before concluding at 55.41, showing a fall of 30 paise, or 0.54%.
This is rupee’s lowest level this year. It had closed at 55.45 on November 27, 2012.
“Tomorrow's (Wednesday) FOMC (The Federal Open Market Committee) minutes, Bernanke’s speech and BOJ (Bank of Japan) press conference will be the key drivers for the forex market,” said Abhishek Goenka, founder and CEO, India Forex Advisors.