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Rupee continues to fall against dollar on fund outflows

Mumbai: The rupee continues to lost ground against the US dollar on Tuesday and ended lower by 11 paise at 64.63 on high US currency demand from importers amid growing geopolitical unrest.

The rupee fell for a second day as sluggish domestic equities along with continued selling by foreign investors kept the pressure on the domestic currency. A broadly weak greenback overseas, on the other hand, cushioned the losses.

Global markets tumbled after British Prime Minister Theresa May made a surprise announcement of early elections on June 8, while investors also kept an eye on continuing tensions in the Korean peninsula.

Domestic bourses remained under selling pressure for a fourth straight session due to continued profit-taking in key frontline heavyweights amid concern about corporate earnings.

Foreign investors sold shares worth Rs 930.67 crore on net basis, provisional exchange data showed.

The rupee resumed modestly lower at 64.50 from Monday’s closing value of 64.52 at the Interbank Foreign Exchange(forex) market and traded in a tight range most part of the day.

It touched an intra-day high of 64.47 briefly in afternoon deals before reversing all of its recovery gains to end at 64.63, showing a loss of 11 paise, 0.17 per cent.

The RBI fixed the reference rate for the dollar at64.5657 and for the euro at 68.7431.

In worldwide trade, the greenback traded little changed against its six major counterparts. The dollar index was trading lower by 0.34 percent at 99.86.

In cross-currency trade, the Indian unit dropped against the pound sterling to end at 81.85 from 80.93 per pound and also slipped against the euro to finish at 69.01 compared to68.61 earlier.

But, it recovered against the Japanese yen to settle at 59.36 per 100 yens from 59.54.

On the equity front, benchmark BSE Sensex declined over94 points to end at 29,319.10, while broader Nifty fell 34.15points to 9,105.15.
In the forward market today, the premium for dollar declined further owing to persistent receivings from exporters.

The benchmark six-month premium for September edged lower to 146-148 paise from 148-150 paise and the far-forwardMarch 2018 also moved down to 303-305 paise compared to306-308 paise Monday.

In the global commodity front, crude prices drifted to their lowest in 11 days on Tuesday on news that US shale oil output in May is expected to post the biggest monthly increase in more than two years.

The global benchmark Brent crude futures were down 49cents at USD 54.87 a barrel in early trade.

PTI