The Indian rupee fell by 1.25 percent on Tuesday, its biggest fall in nearly three months, as the stock market fell and regular month-end demand for dollars was exacerbated by broad-based strength in the US currency. The partially convertible rupee closed at 47.88/90 per dollar, down from Monday's close of 47.28/30, as it extend its retreat from Friday's five-month high of 46.90.
It was the rupee's sharpest fall since March 2, when it had slumped 1.5 percent just a day before it dropped to its record low of 52.2. "The rupee was mainly tracking the majors overseas and added to that there was some month-end dollar demand," said V.Kumar, chief dealer with State Bank of Travancore.
"The near-term outlook for the rupee is bearish. Last week's rally was a sentimental reaction after the elections and was not backed by any fundamental factors. Added to that, the dollar is gaining against majors, which is hurting," he said, adding the rupee would find it hard to breach resistance at 46.50/46.75.
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