India rupee hits 1-1/2 month lows; vulnerable to more losses

Mon Nov 5, 2012 5:52pm IST

Related Topics

* Rupee falls to 54.60/61/dlr vs 53.8050/8150 on Fri

* Stops get triggered around 54.20 levels

* US elections, Greek austerity vote awaited

By Swati Bhat

MUMBAI, Nov 5 (Reuters) - The Indian rupee dropped on Monday to its weakest level against the dollar in more than a month and half, tracking a bout of global risk aversion ahead of U.S. elections and a key Greek parliamentary vote on austerity.

The 1.47 percent fall in the rupee almost matched the 1.5 percent fall on Oct. 8, as the local currency tracked the drop in the euro to a near two month low on the renewed uncertainty about the euro zone's debt crisis as Greek lawmakers are due to vote on reforms on Wednesday.

Choppy domestic shares also added to the downward pressure on the rupee. Shares ended up 0.04 percent, with defensive stocks gaining on caution ahead of the U.S. election on Tuesday.

"Euro's losses and some corporate dollar demand hurt the rupee today with some stops also getting triggered," said Hari Chandramgathan, a senior foreign exchange dealer with Federal Bank.

"The outlook for USD still bullish ahead of US elections and we could see USD touching levels of 55.60 or 55.85 in the medium term," he added.

The partially convertible rupee closed at 54.60/61 p er dollar after falling to 54.65 during the session, its weakest since Sept. 14. The rupee closed at 53.8050/8150 on Friday.

In the offshore non-deliverable forwards market, the one-month contract was at 54.96 w hile the three-month was at 55.53.

Traders say stop-losses were triggered after the USD/INR pair breached the 54.20 mark, leading to heavy buying.

Corporate dollar purchases also hit the local unit: a large iron ore refiner had bought around $200 million from the market in the first half of the session, traders said.

In the currency futures market, the most-traded near-term dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 54.93 wi t h a total traded volume of around $6.6 bi l lion. (Editing by Rafael Nam)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Kashmir Package

Kashmir Package

Modi announces relief package for flood-hit Kashmir.  Full Article 

Microsoft Earnings

Microsoft Earnings

Microsoft sales beat Street hopes, cloud profits up.  Full Article 

U.S. Economy

U.S. Economy

Spectre of no-inflation world looms over Fed's return to normal  Full Article 

Insider Trading

Insider Trading

Rengan Rajaratnam, SEC to settle civil insider trading charge.  Full Article 

Market Watch

Market Watch

Betting on the beaten up? Investors pin hopes on stocks in Europe, Japan.  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage