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

Election 2014

Election 2014

More than 814 million people — a number larger than the population of Europe — are eligible to vote in the world’s biggest democratic exercise.  Full Coverage 

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

REUTERS SHOWCASE

Eyeing Role

Eyeing Role

Top economist Jagdish Bhagwati eyes role in Modi government  Full Article 

Election 2014

Election 2014

Breakingviews: Singh wasn’t king, Modi could be  Full Article 

Telecom Sector

Telecom Sector

Japan's NTT DoCoMo to exit India telecoms joint venture - sources  Full Article 

Next Nokia CEO

Next Nokia CEO

Nokia to name Rajeev Suri as next CEO on Tuesday - report  Full Article 

Conspiracy Lawsuit

Conspiracy Lawsuit

Apple, Google agree to pay over $300 million   Full Article 

Stock Split Trend

Stock Split Trend

Trend-setter Apple's stock split could bring out the copycats  Full Article 

Winning Start

Winning Start

Microsoft beats Wall Street on new CEO debut   Full Article 

Reuters India Mobile

Reuters India Mobile

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