Rupee drops 6 paise against dollar; halts 3-day rally

The rupee today weakened by 6 paise against the dollar to close at 64.50 on month-end demand for the US currency from importers, ending its three-day spectacular run.

In the previous three sessions, the rupee had gained 45 paise to close at 64.44 on Friday last.

Renewed month-end demand for the US currency from importers and corporates mainly weighed on the domestic currency, dealer said.

Also, foreign portfolio investors were sellers of stocks today as provisional exchange data showed FPIs sold shares worth Rs 709 crore on net basis.

A record-setting rally in domestic equities along with robust position of forex reserves and improving macro-economic environment largely limited the fall, a forex dealer said.

Stocks kept the record-breaking touch intact for the third day as the Sensex today closed at a fresh life high of 31,109 while the Nifty settled above 9,600 for the first time ever as ample liquidity gave buying a lift.

The rupee today resumed lower at 64.48 at the Interbank Foreign Exchange (Forex) market. It traded in a range of 64.45 and 64.59 during the day before ending at 64.50, revealing a loss of 6 paise, or 0.09 per cent.

The RBI, meanwhile, fixed the reference rate for the dollar at 64.5565 and for the euro at 72.1354.

In cross-currency trades, the rupee recovered against the euro to settle at 72.14 as compared to 72.21 and also bounced back against the Japanese Yen to finish at 57.94 per 100 yens from 58.05 last Friday.

The local unit ended unchanged against the British pound at 82.82. The British pound today recovered against other Asian currencies after Friday's dramatic fall.

The US dollar was also steady against a basket of six currencies, holding above last week's six-and-a-half month lows.

In the forward market, premium for dollar remained lacklustre owing to sustained receivings from exporters.

The benchmark six-month premium payable in October softened to 125.5-127 paise from 127-128 paise and the far forward April 2018 contract also declined to 270-271 paise from 274-275 paise earlier.

Global crude prices resumed downtrend after a brief rebound after data showed further increase in US drilling activity amid lingering concerns over whether OPEC action would be enough to stem the tide of oversupply.

Oil cartel OPEC and some non-OPEC producers had pledged last week to extend output cut for nine months last week.

(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)