Re hits 2-month low, tanks 39 paise against dollar on US rate hike fears
The Indian rupee on Monday fell to two-month low and closed with a sharp 39 paise loss at 62.55 against the US dollar after better-than-expected jobs data spurred expectations of an early hike in US interest rates.business Updated: Mar 09, 2015 18:24 IST
The Indian rupee on Monday fell to two-month low and closed with a sharp 39 paise loss at 62.55 against the US dollar after better-than-expected jobs data spurred expectations of an early hike in US interest rates.
Fresh dollar demand from importers amid strong cues in overseas markets and a steep fall in local equities also weighed on the rupee value.
The dollar gained as strong payrolls data raised bets of a Fed rate hike, as early as summer. This pushed the dollar index to fresh 11-year high. At the Interbank Foreign Exchange (Forex) market, the Indian rupee opened lower at 62.60 against last Thursday's close of 62.16.
It declined further to a two-month low of 62.7350 -- a level not seen since January 8, 2015 when it touched an intra-day low of 63.20.
Later, it recovered some ground to touch a high of 62.53 before concluding at 62.55, still showing a fall of 39 paise or 0.63%. The Indian benchmark S&P BSE Sensex was down by 604.17 points or 2.05%-- its biggest fall in last two months.
Foreign Portfolio Investors (FPI) bought shares worth $226.36 million last Thursday, as per Sebi data. Pramit Brahmbhatt, Veracity Group, CEO said,"The trading range for the spot rupee is expected to be within 62.00 to 63.00."
The forward premia remained weak on continued receipts from exporters. The benchmark six-month premium payable in August eased to 229.5 - 231.5 paise from 231-233 paise last Thursday and the forward contracts maturing in February 2016 also softened to 446 - 448 paise from 448.5-450.5 paise previously.
The Reserve Bank of India fixed the reference rate for dollar at 62.6160 and for Euro at 67.9634. The rupee improved further against the pound to 94.54 from 94.72 last Thursday and also moved up sharply against the euro to 68.02 from 68.67. It also moved up further slightly to 51.71 per 100 yen from 51.74 last weekend.