Rupee plunges to 7-week low vs US dollar

Dropping for the fourth straight day, the Indian rupee on Thursday fell 38 paise to end at seven-week low of 61.34 against the Greenback following slump in local shares and sustained month-end dollar demand from importers.

A sharp rise in dollar value overseas, including the Euro after a set of solid data in the US, also weighed on the rupee that today logged worst single-day fall since September 15.

At the Interbank Foreign Exchange (Forex) market, the local unit commenced slightly better at 60.94, which was also the day's high, from previous close of 60.96.

Rupee, however, started losing ground in line with weakness in stocks and touched a low of 61.4150 -- a level not seen since August 8, 2014 when it had registered intra-day low of 61.74.

Finally, the Indian currency settled at seven-week low of 61.34, logging a steep fall of 38 paise or 0.62 per cent. This closing is the rupee's weakest since 61.49 on August 6, 2014.

In four straight days, the rupee has stumbled by 86 paise or 1.41 per cent. Suresh Nair, Director, Admisi Forex, said: "The rupee depreciated as upbeat US home sales data fuelled further expectations for an early rate hike by the Federal Reserve.

The rupee also weakened as state-run banks bought dollars, possibly on behalf of exporters. Month-end importer demand also weighed on the rupee."

The Indian benchmark S&P BSE Sensex today plunged by 276.33 points, or 1.03 per cent to one-month lows.

FPIs/FIIs sold shares worth $112.91 million yesterday, as per Sebi data. The dollar index was up by 0.37 per cent against a basket of six major global currencies after US housing data showed strong surge.

Pramit Brahmbhatt, Veracity Group CEO said,"The trading range for the spot rupee is expected to be within 60.80 to 61.80." In forward market, premium remained weak on consistent receipts by exporters.

The benchmark six-month premium payable in February dipped to 210.5-212.5 paise from last close of 215.5-216.5 paise and far-forward contracts maturing in August, 2015 also dropped to 466-468 paise from 471.5-472.5.

The Reserve Bank of India fixed the reference rate for dollar at 61.0245 and for the euro at 77.8429.

The rupee declined against the pound to 99.97 from 99.89 previously while fell back to 56.15 per 100 Japanese yen from 56.04. It, however, improved further to 77.98 per euro from 78.21.