Rupee slips 18 paise to 69.69 against U.S. dollar on high dollar demand

The rupee had settled at 69.51 against the U.S. dollar on May 27.

The rupee on May 28 declined by 18 paise to close at 69.69 against the U.S. currency, weighed down by month-end dollar demand from importers and rising crude oil prices.

Forex traders said that weakened Asian currencies also added to the pressure on the domestic unit.

However, gains in domestic equities supported the rupee and capped its losses to some extent, they added.

At the interbank foreign exchange (Forex) market, the domestic currency opened lower at 69.68 per dollar and fell further to touch the day’s low of 69.74. It finally settled at 69.69, down 18 paise over its previous close.

The rupee had settled at 69.51 against the U.S. dollar on May 27.

“Month-end dollar demand from oil importers, weaker Asian currencies and probable foreign funds outflows by MSCI re-balancing dragged the rupee lower in Tuesday’s trade,” said V.K. Sharma, Head PCG & Capital Markets Strategy, HDFC Securities.

Going forward, the focus will be on RBI monetary policy outcome scheduled on June 6, on GDP data and manufacturing activity numbers scheduled on Friday this week.

Brent crude futures, the global oil benchmark, climbed 0.53% to $70.48 per barrel.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.16% to 97.77.

Meanwhile, government bonds rose, leading to 0.39% drop in the yield to 7.14%.

Foreign institutional investors (FIIs) remained net buyers in the capital markets, putting in ₹1,215.36 crore Monday, as per provisional data.

Continuing their record-setting spree for a third day in a row, domestic equity benchmarks Sensex and Nifty Tuesday hit fresh closing highs on sustained foreign fund inflows coupled with positive domestic cues.

After swinging over 300 points in a highly volatile session, the 30-share index ended 66.44 points, or 0.17%, higher at 39,749.73 — its all-time closing high. Likewise, the broader NSE Nifty inched 4 points, or 0.03%, higher to 11,928.75 — another closing peak for the index.

Meanwhile, Financial Benchmark India Private Ltd. (FBIL) set the reference rate for the rupee/dollar at 69.4327 and for rupee/euro at 77.8220. The reference rate for rupee/British pound was fixed at 88.4795 and for rupee/100 Japanese yen at 63.38.

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