Rupee falls by 7 paise to 66.84 against dollar

At lower levels, a supportive buying in dollar forced rupee to depreciate since opening trade

The rupee, on Monday, fell by 7 paise against the US currency to close at 66.84 on fresh dollar demand from banks and importers on the back of strong dollar in overseas markets.

Firm stock markets as well as consistent foreign capital inflows failed to restrict the rupee's fall against the dollar, a forex dealer said.

The rupee opened lower at 66.85 per dollar as against the last closing level of 66.77 per dollar at the Interbank Foreign Exchange (Forex) market. It hovered in a range of 66.71 and 66.8575 before ending at 66.84 a dollar, showing a loss of 7 paise or 0.10 per cent.

The domestic currency had gained 22 paise or 0.33 per cent in the previous two trading days.

Pramit Brahmbhatt of Veracity Financial Services said, "At lower levels, a supportive buying in dollar forced rupee to depreciate since opening trade. Trading range for the spot USD/INR pair will be 66.50 to 67/USD."

Meanwhile, the RBI fixed the reference rate for the dollar at 66.7407 and euro at 74.0622.

In cross-currency trades, the rupee recovered against the pound sterling to settle at 87.25 from 87.95 on last Friday and also recouped against the Japanese yen to end at 65.31 per 100 yens from 66.05.

The domestic unit recovered against the euro to close at 74.05 from 74.32.

The dollar index was trading up by 0.09 per cent against a basket of six currencies in the late afternoon trade.

In Asian trade, the dollar strengthened against the yen, extending its gains after strong US job figures bolstered expectations of faster economic growth and raised the probability of a Federal Reserve interest rate increase this year.

In the forward market, premium for dollar continued to decline on sustained receivings from exporters.

The benchmark six-month premium for January 2017 eased to 190-192 paise from 191-193 paise on last Friday while far forward July 2017 contract ruled steady at 388-390 paise.

Oil edged higher to near $42 a barrel in Asia, on Monday, but analysts said the increase was unlikely to last as the commodity remains under pressure by a supply glut and a strong dollar.

Meanwhile, the benchmark BSE Sensex rose further by 104.22 points or 0.37 per cent to close at 28,182.57.

Photograph: Reuters