Mumbai: Tracking a steep fall in local share market, the Indian rupee on Tuesday washed out initial gains and ended with a loss of 16 paise at over-one week low of 63.57 against the Greenback.
Besides, the euro sank against the dollar to the lowest level in nearly nine years as investors worried about a possible Greek exit from the eurozone and sliding oil prices. Traders said this also weakened the rupee sentiment amid sustained dollar demand from importers, including oil firms.
At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced better at 63.37 a dollar from previous close of 63.41. It then improved further to a high of 63.30. Later, the rupee met with strong resistance following crash in local stocks and hit a low of 63.62 before concluding at 63.57, a net fall of 16 paise or 0.25 per cent.
This is its weakest close since 63.67 on December 29, 2014. Yesterday, the rupee lost 12 paise or 0.19 per cent. In the Indian stock market, benchmark S&P BSE Sensex on Tuesday plunged by 855 points, or 3.07 per cent, in its worst fall since July 6, 2009.
Meanwhile, the dollar index, a gauge of six major global rivals, was up by 0.25 per cent. Veracity Group CEO Pramit Brahmbhatt said: "The Indian rupee depreciated almost by a quarter of a per cent, taking cues from dollar demand from oil companies.
Local equities forced the currency to trade weak. The trading range for the spot rupee is expected to be within 63.20 to 64.00." Oil prices continued to drop, with the US benchmark contract briefly falling below $50 a barrel for the first time in more than five years.
Meanwhile, premia closed weak on fresh receipts by exporters. The benchmark six-month premium payable in June declined to 222.5-224.5 paise from 225-227 paise on Monday. Premium on forward contracts maturing in December also moved down to 426.5-428.5 paise from 434-436 paise.
The Reserve Bank of India fixed the reference rate for dollar at 63.3850 and for Euro at 75.7958. The rupee remained firm to end at 96.57 against the pound from 96.74 previously while fell back slightly to 75.61 per euro from 75.53.
It dropped further to 53.40 per 100 Japanese yen from 52.68 on Monday.
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