September 14, 2018 / 4:01 AM / a year ago

Rupee erases all gains on strong dollar demand from oil companies - traders

A customer hands Indian currency notes to an attendant at a fuel station in Mumbai, August 13, 2018. REUTERS/Francis Mascarenhas/File Photo

MUMBAI (Reuters) - The rupee erased all gains against the dollar and weakened sharply to 71.99 on Friday after sustained dollar demand from oil importers pushed the unit below a strong resistance level, dealers said.

The rupee was trading at 71.94 to the dollar, after touching 71.52, its strongest since Sept. 5 and compared with its previous close of 72.1950.

“Oil importers have been buying heavily today (Friday) taking advantage of the rally after a long time,” said a senior dealer at a state-run bank.

“That along with other importer (dollar) demand pushed the rupee below 71.80 level which was a key resistance level.”

Forex traders will also closely watch an economic review meeting by Prime Minister Narendra Modi scheduled on Saturday for any steps that could prop up the rupee, which has been the worst performer in Asia so far in 2018.

Reporting by Suvashree Dey Choudhury; Editing by Sunil Nair

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