Rupee Trips 11 Paise To 67.87 Against Dollar

Mumbai: After a brief recovery, the rupee once again turned weaker against the US dollar by depreciating 11 paise to end at 67.87 on fresh dollar demand from importers and banks.

Heavy capital outflows alongside near-term consequences of the Federal Reserve rate hike largely kept sentiment shaky despite a dollar retreat.

The US central bank raised interest rates by a quarter point and signalled that hikes could come next year at afaster pace than some expected.

However, a steady stream of dollars from export receivables and overseas remittances continued to give the rupee some support, a forex dealer commented.

In an extremely quiet and range-bound trade at the Interbank Foreign Exchange market, the domestic currency resumed a tad lower at 67.78 from last Friday's closing level of 67.76.

It immediately staged a rebound following adequate supplies of greenback and touched an intra-day high of 67.71 in late afternoon deals.

However, the recovery momentum seems to be short-lived as the local unit turned weak and fell back to 67.88 before ending at 67.87, showing a loss of 11 paise, or 0.16 per cent.

The rupee had gained 7 paise on Friday largely overcoming the pressure created by US Fed's rate hike.

In worldwide trade, the US dollar retreated from its recent multi-year highs to trade subdued against major rival currencies on the back of sluggish US property data which failed to meet expectations, triggering some downward pressure.

The US dollar index was quoted marginally higher at 102.95 in late afternoon trade.

Meanwhile, the RBI today fixed the reference rate for the dollar at 67.7262 and euro at 70.8416.
 
In cross-currency trades, the rupee fell back a tad lower against the pound sterling to settle at 84.32 from 84.31 and also drifted further against the euro to finish at 70.84 as compared to weekend level of 70.78.

The home unit continued to lose ground against the Japanese yen to close at 57.89 from 57.34 per 100 yens previously.

In the meantime, India's foreign exchange reserves dropped further by $887.2 million to $362.987 billion in the week to December 9.

Foreign investors have pulled out more than Rs 19,500 crore from the capital market this month so far amid rate hike by the US Federal Reserve and higher oil prices.

Meanwhile, domestic equities remained under selling pressure following profit-taking in capital goods, pharma, metal and auto shares even as investors stayed on sidelines in the absence of definite cues amid sluggish global trend.

The benchmark Sensex dropped over 114 points to end at 26,374.70, while broader Nifty fell 35.10 points to 8,104.35.

In the forward market, premium for dollar edged higher owing to sustained paying pressure from corporates.

The benchmark six-month premium for May moved up to 134.5-136 paise from 133-135 paise and the far-forward November 2017 contract also firmed up to 280.5-282.5 paise  as against 279-281 paise earlier.

On the global commodity front, crude prices rebounded sharply on the back of weaker dollar and expectations of tighter crude supply going into new year.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)