Rupee hits 1-1/2 month low; vulnerable to more losses
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)
- Tweet this
- Share this
- Digg this
- Bighorn sheep escapes Los Angeles Zoo, dies after car strikes it
- U.S. plans to arm Iraq's Sunni tribesmen with AK-47s, RPGs, mortars
- Apple $450 mln e-book settlement gets final court approval
- China building South China Sea island big enough for airstrip - report
- Samsung files ITC complaint to block Nvidia chips from U.S. - Bloomberg
India approved on Saturday the purchase of 814 mounted gun systems for the army at a cost of 157.5 billion rupees ($2.55 billion), a defence ministry spokesman said. Full Article