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The rupee dropped to a near three-week low on Friday and posted its biggest weekly fall in two months as the dollar strengthened globally, on the back of upbeat US data overnight which led some investors to price-in a less dovish stance by the US Fed.
The rupee ended at 61.73 compared with the previous close of 61.50 a dollar. It had opened at 61.96, tracking the Non-Deliverable Forward (NDF) market. During intra-day trade, the rupee touched a low of 61.97 and a high of 61.70 a dollar. The rupee had ended at 61.85 on October 15.
However, a rise in domestic stocks helped the rupee from falling to the level of 62 a dollar. There were dollar flows by foreign institutional investors (FIIs) which helped the rupee.
“The huge fall in the euro and a rally in the dollar index have pushed the rupee down today, but 62 is a psychological level which will be a key,” said Paresh Nayar, head of foreign exchange and debt trading, First Rand Bank.
The rupee fell 0.5 per cent during the week, its biggest weekly fall since the last week of August.
The index of the dollar against six major currencies was up 0.4 per cent. Currency dealers will monitor developments on the global front for near-term cues, as there is no data or event due on the domestic front.
According to S Srinivasaraghavan, head of treasury at Dhanlaxmi Bank, next week the rupee might trade in the range of 61.25 and 62.25 per dollar.
“At the start of the week the rupee may weaken. But as the week proceeds, there will be FII flows, due to which the rupee will appreciate,” he said.
