Rupee crosses 68-mark against US dollar

Dollar bounced back toward its 14-year high against a basket of major currencies

The rupee on Tuesday slipped further to a fresh two-week low of 68.03, plummeting by 16 paise against the US dollar, following a sudden rise in the dollar’s value against other global currencies.

Sustained dollar demand from importers and corporates alongside heavy capital outflows largely kept domestic unit under pressure for the second straight day.

The American currency regained its buoyant strength after a brief sideways movement following overnight US Fed's optimistic tone about the future of the US economy and also expectations of further rate hikes faster than initially expected.

Fresh geopolitical unease on the back of attacks in Germany and Turkey on Monday also added some amount of volatility in the currency market, a dealer commented.

Foreign Institutional Investors continued their relentless sell-offs and sold domestic equities worth Rs 535.77 crore on Monday, according to the provisional data. The home currency opened a tad higher at 67.86, as compared to Monday's closing value of 67.87 at the Interbank Foreign Exchange (Forex) market and gained further ground to 67.81 on fresh dollar selling by exporters.

However, the rupee trimmed its initial gains and kept drifting to hit a intra-day low of 68.07 late afternoon deals before ending at 68.03, revealing a fall of 16 paise, or 0.24 per cent.

This is the weakest close since December 5 when it had closed at 68.21 against the dollar. The US dollar index was trading sharply higher at 103.56 in late afternoon.

Meanwhile, the Reserve Bank of India fixed the reference rate for the dollar at 67.8954 and euro at 70.4686.