The Indian rupee dropped for a second session on Friday, hiting its lowest level in over a month-and-half as stop-losses were triggered in the dollar after rumours of a possible downgrade by Fitch Ratings and the follow-on breach of a key technical level. "The euro came down, there were some rumours regarding Fitch talking of an India downgrade - these together led to triggering of several stops," said A. Ajith Kumar, a senior foreign exchange dealer at Federal Bank.
The partially convertible rupee ended at 54.90/91 per dollar, after hitting 54.9425, its lowest since January 9. The pair had ended at 54.36/37 on Thursday. The rupee dropped 1.3 percent on the week, matching its fall in the February 15 week, which was its biggest weekly drop in three months. The UDS/INR pair hit a high of 54.73 in opening deals but quickly retreated. The 54.73 level was the 50 percent Fibonacci retracement of the decline from the high of 55.89 on November 26 to the low of 52.87 on February 6. The breach of that level, triggered a further stop-loss in the dollar, traders said.
In the offshore non-deliverable forwards, the one-month contract was at 55.33 while the three-month was at 55.97. In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and United Stock Exchange all closed at around 55.24 with a total volume of $7.06 billion.
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