Rupee loses steam, down 18 paise to 66.40

RBI fixed the reference rate for the dollar at 66.2930 and euro at 74.8978

Snapping its two-day winning spree against the American currency, the rupee on Thursday dropped by 18 paise to close at 66.40 on fresh demand for the US dollar from banks and importers despite weakness in greenback overseas.

The rupee resumed lower at 66.32 against Wednesday's level of 66.22 at the Interbank Foreign Exchange (Forex) market and hovered in a range of 66.17 and 66.42 per dollar before ending at 66.40 on fresh dollar demand from importers, showing a loss of 18 paise or 0.27 per cent.

The rupee had gained by 42 paise or 0.63 per cent in previous two days.

The dollar index was down 0.13 per cent against a basket of six currencies in the late afternoon trade.

Meanwhile, the RBI fixed the reference rate for the dollar at 66.2930 and euro at 74.8978.

In cross-currency trades, the rupee dropped further against the pound sterling to close at 95.42 from 95.22 on Wednesday.

However, it recovered against the euro to 75.16 per euro from 75.30 previously.

The domestic currency firmed up further against the yen to 60.48 per 100 yens from 60.64.

In the global market, the euro remained on the defensive, having made an about-face as investors adjusted positions in the lead up to a policy meeting by the European Central Bank.

The dollar traded lower against the yen in the late Asian trade on Thursday as the greenback was unable to move much higher from the levels overnight amid a lack of fresh trading cues.

The US currency was tracking its overnight strength after upbeat US housing data. During Asia trade, however, the dollar was unable to rise further and was capped just below the key ¥110.00-threshold, despite a recovery in crude oil and global stock prices.

In forward market, premium for dollar recovered on fresh paying pressure from corporates.

The benchmark six-month premium for September rose to 198-200 paise from 194-196 paise previously and far-forward March 2017 contract also firmed up to 395-397 paise from 389-391 paise.

Oil prices on Thursday built on recent gains after data showed US production fell to 18-month lows and Iraq pushed for a fresh meeting of crude majors on limiting output.

In Asia, US benchmark West Texas Intermediate for delivery in June was up 12 cents, or 0.27 per cent, at $44.30 while Brent crude for June added eight cents, or 0.17 per cent, to $45.88.

The benchmark Sensex moved up further by 36.20 points or 0.14 per cent to 25,880.38.