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Rupee Settles 36 Paise Down At 70.02 Against Dollar

On May 16, 2014 -- the day when the 16th Lok Sabha election results were announced -- the rupee traded around 58.74 against dollar.

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Rupee Settles 36 Paise Down At 70.02 Against Dollar

The rupee had settled at 69.66 against the dollar on Wednesday.


Mumbai: 

The rupee surrendered all its early gains and closed 36 paise lower at 70.02 against the dollar on Thursday after investors looked past the euphoria over Bharatiya Janata Party's election victory and shifted focus to macro-economic developments that will set the tone for the forex market going ahead. 

As the general election is over with the Narendra Modi's Bharatiya Janata Party's resounding victory, a host of domestic and global factors like crude oil prices, trade tussle between the US and China and the upcoming RBI monetary policy will mainly influence the forex market movements, according to analysts. The Modi-led National Democratic Alliance (NDA) is all set to form the government at the Centre for a second consecutive term after having swept the Lok Sabha polls.    

At the forex market, the domestic currency opened at 69.45 a dollar and gained further strength to touch a high of 69.37 during the day. The domestic currency, however, could not hold on to the gains and settled at 70.02 per dollar, down 36 paise over its previous close. The rupee had settled at 69.66 against the dollar on Wednesday. On May 16, 2014 -- the day when the 16th Lok Sabha election results were announced -- the rupee traded around 58.74 against dollar.    

In line with weaker rupee on Thursday, the benchmark BSE Sensex erased early gains to end 299 points lower as investors booked profits after stocks soared to record highs. During the day, the Sensex hit the 40,000 mark while the Nifty crossed the 12,000-level for the first-time ever.    

"Rupee started at two week's high of 69.50 against American dollar, but erased gains to trade at 70.04 with the loss of 37 paise or 0.52 per cent. Now, the focus will shift to crude oil, trade war and RBI monetary policy," said V K Sharma, Head PCG & Capital Markets Strategy, HDFC Securities.  

Meanwhile, government bonds rose, leading to 0.33 per cent drop in yield to 7.24 per cent.    

Foreign institutional investors (FIIs) were net buyers in the capital markets, buying shares worth 1,352.20 crore on Thursday, according to exchange data. The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.16 per cent to 98.19.    

Brent crude futures, the global oil benchmark, eased 1.65 per cent to trade at $69.82 per barrel.    



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