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Rupee loses steam after hitting 1-week high, ends 11 paise lower

PTI 04 Jun 2012, 19:05:32 IST
Mumbai, Jun 4: In volatile trade, the rupee today touched a one-week high of 55.20 but late dollar demand from importers and foreign funds pulled it 11 paise down to close at 55.65 against the US currency, cutting short a two-day winning string.

At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed at 55.50 from last Friday's close of 55.54 and improved further to a high of 55.20 in morning deals on continued dollar selling by exporters. 

However, the currency later fell back to a low of 55.67 on heavy dollar demand from importers and foreign funds, before concluding at 55.65.

According to data from stock exchanges, Foreign Institutional Investors (FIIs) sold stocks worth Rs 637.14 crore today, putting pressure on the domestic currency that had bounced back after hitting a record low of 56.52 last Thursday.

Forex dealers said sustained capital outflows and expectations of more after looking at the current uncertain stock markets could weigh on the rupee in the days ahead. 

The dollar index, which was up in early session, was trading down by 0.05 per cent against a basket of currencies while the front-month July Brent crude oil contract trading on London's ICE futures exchange was down 1.7 per cent at USD 96.82 a barrel.

Meanwhile, the BSE Sensex, which was down by over 216 points intra-day, later recouped early losses and ended 23.24 points higher.