Rupee weakens further to 66.89, down 8 paise

Mumbai, Oct 21 (PTI) Falling for the second-straight session, the rupee today depreciated by 8 paise to end at 66.89 against the US dollar due to increased demand for the American currency from importers and state-owned banks.

A rise in the dollar on Friday to touch a seven-month high against a basket of currencies driven by buoyant expectations of a US interest rate hike this year mainly weighed on the forex trade.
Lacklustre domestic equities alongside ongoing FCNR redemptions further added pressure on the local currency, a forex dealer said.

Though, the trading largely remained range-bound in the absence of any market-moving factors, ahead of the weekend.

The domestic currency opened substantially lower at 68.89 from Thursday's closing value of 66.81 at the Interbank Foreign Exchange market.

After moving in a tight band throughout the session, it finally settled at 66.89, revealing a fall of 8 paise, or 0.12 per cent.

It moved between 66.8350 and 66.9450 during the day.

In worldwide trade, the greenback rose to its highest since March against all major emerging market currencies.

Pound sterling continued to lose ground for the third straight session after European Central Bank Governing Council decided to leave key interest rates unchanged at overnight meeting, but kept the door open to more stimulus in December.

The euro plunged to a seven-month low.

The dollar index, which measures its broader strength against a basket of currencies, was sharply up by 0.31 per cent at 98.59.

The RBI today fixed the reference rate for the dollar at 66.8943 and euro at 72.9750.

In cross-currency trades, the rupee hardened further against the pound sterling to finish at 81.65 as compared with 81.94 and also firmed higher to close at 72.86 from 73.38 earlier.

However, it fell back modestly against the Japanese yen to end at 64.47 from 64.44 per 100 yens earlier. - PTI

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