Rupee tumbles by 30 paise to 7 week low on renewed dollar demand

The rupee tumbled by 30 paise today to close at a seven-week low of Rs44.99/45.00 against the US currency due to renewed dollar demand from banks and importers on the back of a firm trend overseas.
    
"USD/INR resumed lower and hovered in a range of Rs44.74 and Rs44.99. Equity markets traded bearishly throughout the day which weakened the rupee," Alpari India CEO Pramit Brahmbhatt said.
    
"The trading range for the USD/INR will be between Rs44.80-45.30," he added.
    
The rupee lost more than half percent against the dollar, it fell to over a 7 week low as euro continued to lose against the greenback and local equities also traded bearishly which closed down nearly by 1.40%, he said.
    
At the Interbank Foreign Exchange, the rupee opened lower at Rs44.75/76 per dollar as against the previous closing level of Rs44.69/70 per dollar and dropped further to Rs45.00 per dollar before ending the day at Rs44.99/45.00 per dollar.
    
It hovered in a range between Rs44.74 and Rs45.00 per dollar during the day. Fresh dollar demand from banks and importers in view of the firm dollar in overseas markets as well as weak equity mainly affected the rupee value against the dollar, a forex dealer said.
    
In London, the dollar index rose to its highest in three weeks today as investors continued to unwind leveraged carry trades funded in the greenback and pared long bets in commodity-linked currencies.
    
The euro extended its losses against the US dollar in the New York market yesterday as widespread strikes in Greece and more worries about Portuguese banks reduced confidence in Europe's ability to devise a solution to its sovereign debt problems.
    
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 ended lower at 137-139 paise from Wednesday's close of 145-147-1/2 paise.
    
Far-forward contracts maturing in April also closed down at 278-280 paise from 294-1/2-296-1/2 paise in the previous session.
    
The RBI has fixed the reference rate for the dollar at Rs44.79 and the euro at Rs63.59.
    
The rupee recovered against the pound sterling to close at Rs73.15/17 from overnight close of Rs73.75/77 and shot up further against the euro to end at Rs63.71/73 from Rs64.15/17 from the previous session.
    
It, however, reacted downwards against the Japanese yen to Rs55.61/63 per 100 yen from last close of Rs55.17/19.