Rupee closes marginally down at 64.94 against US dollar

The rupee today closed marginally down at 64.94 against the US currency due to continued foreign fund outflows, weak trade data and expectations of a rate hike by the US Federal Reserve.

The domestic unit opened lower at 64.95 per dollar as against yesterday's close of 64.93 at the inter-bank foreign exchange on unabated foreign fund outflows.

The domestic unit hovered between 64.85 and 64.99 during the day before ending at 64.94, down by 1 paisa.

"Trade data showing meek expansion in exports, and dollar eyeing new FED chairman's first rate decision ensured that rupee continue to be restricted to tight trading range," Anand James, Chief Market Strategist at Geojit Financial Services said.

 

The dollar's weakness against some major currencies overseas, however, limited the rupee's losses at the forex market, traders said.

The data released by the commerce ministry showed exports grew by 4.5 per cent in February, the lowest expansion in the last four months, to USD 25.8 billion as shipments of engineering, textiles and gems and jewellery declined, while trade deficit narrowed to a five-month low of USD 12 billion.

The US Federal Reserve is widely expected to tighten the rates next week despite a disappointing February retail sales data and a soft inflation reading.

The 30-share Sensex tumbled by 509.54 points or 1.51 per cent, its biggest single day fall since February 6 when it had lost 561.22 points, to end at 33,176. Intra-day, it shuttled between 33,119.92 and 33,691.32.

Meanwhile, the Reserve Bank of India today fixed the reference rate of the rupee at 64.8737 against the US dollar and 79.9114 for the euro.

In cross currency trade, the rupee fell against the pound to close at 90.68/70 from 90.46/48 earlier. It however gained against the euro to finish at 80.00/02 from 80.25/27 earlier. The rupee traded at 61.47/49 per 100 units against the Japanese yen from 61.28/30 per 100 units yesterday.

In the forward market, the benchmark six-month forward premium payable in August moved to 123.50-125.50 paise against 122.50-124.50 paise earlier. The fag-forward February 2019 contract were up at 243-2.45 paise against 242.50-244.50 previously.