Rupee slips 3 paise in nervous trade; snaps two-day rally

The rupee today weakened by 3 paise to close at 64.24 against the US currency due to fresh demand for the dollar from banks and importers, cutting short its two-day rise.

The dollar gained strength against major world currencies globally after political uncertainty in the UK impacting the rupee sentiment in the domestic market.

The forex market sentiment remained very fragile in the midst of renewed political uncertainty in the UK after the ruling Conservative Party fell short of an overall majority ahead crucial Brexit negotiations, forex dealers said.

The British pound suffered heavy losses against major rivals including the dollar.
 

The dollar index was also up 0.52 per cent against a basket of six currencies.

Foreign investors turned net sellers in Indian equity markets today as they withdrew Rs 100 crore on net basis from stocks, as per provisional exchange data.

The rupee opened lower at 64.27 against Thursday's close of 64.21 at the Interbank Foreign Exchange (Forex) Market on the back of intense dollar pressure.

But, it immediately staged a smart rebound to hit an intra-day high of 64.1650 for a brief period before retreating back.

After plunging to the day's lowest level of 64.33, the local unit finally settled at 64.24, showing a small loss of 3 paise, or 0.05 per cent.

The RBI, meanwhile, fixed the reference rate for the dollar at 64.2584 and for the euro at 71.9823.

The rupee rose sharply against the pound sterling to finish at 82.07 from 83.11 per pound, but fell back against the Euro to settle at 71.88 from 72.15 earlier.

The domestic currency advanced further against the Japanese Yen to conclude at 58.20 per 100 yens from 58.31 yesterday.

The benchmark BSE sensex rebounded by 48.70 points or 0.16 per cent to close at 31,262.06.

In forward market today, premium for dollar declined on fresh receivings from exporters.

The benchmark six-month premium payable in November softened to 138.75-139.50 paise from its previous level of 138-140 paise and far forward May 2018 contract also eased to 282-50-283.50 paise from Thursday's closing level of 284-286.