Indian Rupee: Dips Lower On Fresh Dollar Buying

The Indian rupee dipped lower against the dollar in early trades on Thursday, 21 June 2018 due to fresh buying of the American currency by importers amid sustained foreign fund outflows. Dollar hovering near an 11-month high against a basket of currencies overseas, supported by a rise in US yields, also weighed on the rupee but a higher opening of the domestic equity markets limited the fall.

The domestic currency slipped 16 paise to 68.24 against the US dollar in early trade today after opening at 68.1650. The local unit recovered to a high of 68.1350 so far during the day and was last seen trading at 68.19 in the spot currency market. Yesterday, the local currency had staged a good comeback to end with a sharp gain of 30 paise at 68.08 against the US currency on heavy bouts of dollar selling by banks and exporters with equities gaining ground.

Domestic benchmark indices were trading with small gains in early trade. At 9:18 IST, the barometer index, the S&P BSE Sensex, was up 87.86 points or 0.25% at 35,635.19. The Nifty 50 index was up 24.45 points or 0.23% at 10,796.50. Overseas, Asian stocks were mixed driven by uncertainty surrounding trade relations between the worlds two largest economies. US stock closed mostly higher Wednesday, though the Dow Jones Industrial Average posted its seventh consecutive daily decline.

Meanwhile, the dollar hovered near an 11-month high against a basket of currencies on Thursday, supported by a rise in U.S. yields, while the pound was at its lowest level since November 2017 ahead of a Bank of England monetary policy decision. The dollar index DXY against a group of six major currencies stood at 95.243 after rising to 95.299 overnight, its highest since mid-July 2017. Buoying the greenback, long-term Treasury yields bounced back from three-week lows, as risk aversion felt earlier in the week amid United States-China trade tensions eased for now.