Rupee hits over two-month low at 96.31 against dollar

The rupee fell 37 paise to close at 96.31 against the US dollar on Thursday, its lowest level in more than two months. Rising global bond yields, risk aversion, foreign investor selling and higher crude prices weighed on the currency

Mumbai: The rupee slumped below the psychologically important 96-per-dollar mark on Thursday to close at 96.31 (provisional) against the US dollar, its lowest level in more than two months, amid risk aversion in global markets, surging global bond yields and selling pressure from foreign investors.

Forex traders said the rupee is expected to trade with a negative bias amid risk aversion in global markets and concerns over rising global Treasury yields.

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At the interbank foreign exchange market, the rupee opened at 95.95 and then lost ground to touch an intraday low of 96.34 against the US dollar. At the end of Thursday’s trading session, the domestic unit was quoted at 96.31 (provisional) against the greenback, down 37 paise from its previous close.

On Wednesday, the rupee pared gains to settle flat at 95.94 against the US dollar.

“We expect the rupee to trade with a negative bias on risk aversion in global markets and worries over rising global Treasury yields. A strong dollar and surge in global crude oil prices may further pressurise the rupee,” said Anuj Choudhary, Research Analyst, Mirae Asset Sharekhan.

Choudhary further noted that uncertainty over a US-Iran deal may also pressurise the rupee. However, any intervention by the RBI may support the rupee at lower levels.

Meanwhile, the dollar index, which gauges the strength of the greenback against a basket of six currencies, was trading at 101.90, higher by 0.45 per cent.

Brent crude, the global oil benchmark, was trading 2.54 per cent higher at USD 100.52 per barrel in futures trade.

On the domestic equity market front, the Sensex dropped 570.59 points to settle at 71,909.70, while the Nifty tanked 198.50 points to 22,421.95.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 10,148.41 crore on a net basis on Wednesday, according to exchange data.

On the domestic macroeconomic front, India’s manufacturing sector activity growth touched a seven-month high in September, boosted by accelerating new orders and output.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) rose by more than two index points in September to 55.1 from 52.8 in August, signalling the strongest improvement in the health of the sector in seven months.