Rupee extends losses for 2nd day vs USD, down 10 paise

Continuing its weakening trend for the second straight session, the rupee today fell by another 10 paise to 63.51 against the US dollar on persistent demand for the American currency from banks and importers in line with higher greenback overseas.

Sustained foreign capital inflows into equity market in view of second consecutive gain in Sensex restricted the rupee's fall against the dollar, a forex dealer said.

In a bid to streamline the FDI structure, the government today introduced a composite foreign investment cap by clubbing all forms of overseas investments to define sectoral limits.

Oil prices rose in Asia today on easing concerns about the impact of the expected flood of Iranian supplies on the global market following the country's historic nuclear deal.

US benchmark West Texas Intermediate for August delivery rose 26 cents to USD 53.29 and Brent crude for August climbed 10 cents to USD 58.61 a barrel in late morning trade.

The rupee resumed lower at 63.50 per dollar as against the yesterday's closing level of of 63.41 at the Interbank Foreign Exchange market and declined further to 63.54 before finishing at 63.51, showing a loss of 10 paise or 0.16 per cent.

It has lost 12 paise or 0.19 per cent in two days. The domestic unit hovered in a range of 63.54 and 63.47 per dollar during the day.

The dollar index was trading higher by 0.43 per cent against its major global rivals today.

The dollar strengthened yesterday after Federal Reserve Chairwoman Janet Yellen said economic conditions will likely warrant a Fed interest-rate hike this year during an appearance before the House Financial Services Committee.

The dollar was also trading higher against its major rivals after Greece's Parliament approved the austerity plan demanded by its lenders.

Meanwhile, the benchmark Sensex ended higher by 247.83 points or 0.88 per cent. In the forward market, the premium for dollar moved down further on sustained receipts by exporters.

The benchmark six-month premium payable in December moved down to 203-205 paise from 207-209 paise yesterday and far-forward contracts maturing in June 2016 also closed lower at 427.5-429.5 paise as against 431-433 paise.

The RBI fixed the reference rate for the dollar at 63.4955 and for the euro at 69.3942.

The rupee recovered against the pound sterling to end at 99.05 from 99.10 previously and firmed up further against the euro to 69.17 from 69.86.

It also moved up against the Japanese currency to end at 51.21 per 100 yen as compared to 51.32.