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Rupee Slips 12 Paise Against Dollar; Fed Meet In Focus
The dollar steadied against the yen and euro on Tuesday after its weakest day in a week, with markets still uneasy that a Federal Reserve meeting ending on Wednesday
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The rupee weakened further on Tuesday and closed 12 paise lower at 67.54 against the US dollar on steady demand for the greenback from importers and corporates.
Currency traders stayed on sidelines amid extreme caution ahead of Wednesday s FOMC rate decision.
Heavy capital outflows from foreign funds and release of domestic macroeconomic data, as government will issue inflation data based on Consumer Price Index (CPI) later in the day, largely weighed on trade.
The home currency opened substantially weak at 67.47 as compared to last Friday's closing level of 67.42 at the Interbank Foreign Exchange (forex) market.
It remained under pressure throughout the day and touched an intra-day low of 67.55 during late afternoon deals before ending at 67.54, revealing a loss of 12 paise, or 0.18 per cent.
In worldwide trade, the dollar steadied against the yen and euro on Tuesday after its weakest day in a week, with markets still uneasy that a Federal Reserve meeting ending on Wednesday may provoke more investors to take out greenback's recent gains.
The US dollar index was quoted modestly higher at 101.12 in late afternoon trade.
RBI Reference Rate
Meanwhile, the RBI fixed the reference rate for the dollar at 67.4867 and euro at 71.7654.
In cross-currency trades, the rupee fell back sharply against the pound sterling to end at 85.78 from 85.01 and also retreated against the euro to finish at 71.65 as compared to 71.43 last weekend.
The home unit, however rebounded against the Japanese yen to settle at 58.52 from 58.83 per 100 yens previously.
Meanwhile, India's foreign exchange reserves drifted further by $1.431 billion to $363.874 billion in the week to December 2.
They had touched a life-time high of $371.99 billion in the week to September 30, 2016.
In the forward market, premium for dollar declined owing to sustained receivings from exporter
The benchmark six-month premium for May moved down to 130-132 paise from 132-134 paise and the far-forward November 2017 contract also drifted to 274-275.5 paise from 277-279 paise last Friday.
On the equity front, key benchmark indices rebounded sharply after a brief overnight selloff on the back of heavy short covering and also good buying in auto, oil&gas and FMCG counters.
The flagship sensex rebounded by a whopping 182.58 points to end at 26,697.82, while Nifty surged 51 points to 8,221.80.
Meanwhile, crude prices retreated from 17-month highs but traded little changed despite heavy profit-taking earlier this week largely supported by strong demand in Asia and a supply cut by Abu Dhabi as part of production curbs organised by OPEC and other exporters.