Rupee hits 1-1/2 month low; vulnerable to more losses

MUMBAI Mon Nov 5, 2012 6:51pm IST

A Kashmiri woman walks under a garland made of currency notes on display at a market in Srinagar September 3, 2012. REUTERS/Fayaz Kabli/Files

A Kashmiri woman walks under a garland made of currency notes on display at a market in Srinagar September 3, 2012.

Credit: Reuters/Fayaz Kabli/Files

Related Topics

MUMBAI (Reuters) - The 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 October 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. The Sensex 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 September 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

Shares Hit Record

Sensex, Nifty rise to second consecutive record high

Sensex surges 500 points on BOJ easing, L&T gains

The BSE Sensex and Nifty surged to record highs for a second consecutive session on Friday after Bank of Japan's surprise expansion of its massive stimulus programme raised hopes for additional foreign inflows, boosting blue-chips such as Larsen & Toubro.  Full Article 

REUTERS SHOWCASE

Wilful Negligence?

Wilful Negligence?

SEBI piles pressure on Sahara to sell overseas hotels  Full Article 

Indian Economy

Indian Economy

India's fiscal deficit in H1 almost 83 pct of full-year target.  Full Article 

M&M Earnings

M&M Earnings

M&M Q2 net profit down 4 percent, hit by poor monsoon.  Full Article 

Ban on E-Cigs?

Ban on E-Cigs?

Govt considers ban on e-cigarettes, sale of single smokes.  Full Article 

Commodities

Commodities

Silver futures in India hit four-year low on global cues.  Full Article 

BOJ Policy

BOJ Policy

BOJ shocks markets with surprise easing as inflation slows.  Full Article 

Shadow Banking

Shadow Banking

China's shadow banking sector growing rapidly, third largest in world - FSB.  Full Article 

Reuters India Mobile

Reuters India Mobile

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