The steep decline in commodity prices has reversed.
Tracking weak stock markets, the rupee today plunged by 65 paise to 55.97, its lowest closing in over three weeks, against dollar amid fresh Eurozone worries and month-end US currency demand from oil firms.
The ballooning of crude prices has significantly increased the country's oil import bill and it can also lead to a worsening of the current account deficit and fiscal deficit for the domestic economy.
The currency lost six paise on sustained dollar demand from importers.
The dollar strengthened against other currencies as well in the overseas market.
The rupee on Monday rose by 5 paise to trade at 55.35 against the US dollar in early trade at the Interbank Foreign Exchange as the American currency weakened against euro overseas.
Dealers attributed the fall to the dollar's gains after China devalued yuan, which pushed up demand from importers for the US currency.
The rupee ended marginally higher by two paise at 62.24 against the dollar on Wednesday.
The rupee had lost 21 paise on Tuesday's trade.
At the Interbank Foreign Exchange (Forex) market, the domestic unit opened lower at 56.02 as against its previous close of 55.64 on dollar buying by importers, mainly oil refiners, to meet their month-end requirements.
The rupee fell because of fresh demand for dollar from importers.
The Indian rupee recovered by four paise to 54.99 after touching all-time low of 55.07 against the American currency in the late morning trade due to mild selling of dollars by banks following following measures taken by RBI to curb the local currency's fall.
Forex dealers said fresh dollar demand from banks and particularly, month-end demand from oil importers despite weakness of the dollar in the overseas market pulled down the rupee.
Concerns related to capital outflows in the aftermath of the first US interest rate hike in nearly a decade predominantly weighed on the rupee trade.
The rupee strengthened by 13 paise to 61.67 against the US dollar at close.
Increased demand for the dollar weighed on the local currency.
The Indian rupee dropped by 58 paise to a lifetime low of Rs 52.73 per US dollar in early trade on Tuesday on persistent demand for the American currency from banks and importers amid sustained foreign capital outflows from the equity market.
In dull trade, the rupee on Monday ended a mere two paise lower at 60.20 against the US dollar on weak local equities and imported-driven demand for the American currency.
Rupee closed at 61.86 against the dollar on Tuesday.
Weak equity markets too hit rupee sentiment
The rupee weakened even as the dollar fell against major global currencies
Rupee gained on increased selling of the US currency by banks and exporters
The dollar index was trading lower by 0.03 per cent against its major global rivals today.
Weakness in euro against the dollar weighed on the rupee.
The CAD was brought under control in 2013-14 after government imposed restrictions on import of gold. Following, this in 2014, certain restrictions were withdrawn.
'A strong foreign exchange reserve is the best safety net against global spillovers.'
In fairly active trade at the Interbank Foreign Exchange (forex) market, the local currency resumed firm at 39.32/34 a dollar from yesterday's close of 39.44/45 a dollar and later surge to 39.31 level on the back of heavy capital inflows into equity.
However, foreign capital inflows into equity market restricted the rupee's fall to some extent.
According to analysts, IT firms like Infosys, TCS and HCL Technologies are likely to benefit the most on account of larger US exposures and dollar billing.
The rupee had gained 28 paise against the American currency to settle at nearly two-month high at 66.74 in Monday's trade.
The rupee on Tuesday gained 29 paise to close at seven-month high of 60.48 against the dollar on sustained selling of the US currency by exporters and banks.
Unwinding of long dollar positions by banks too aided the sentiment
Rupee gains for 4th day against dollar, up 17 paise on Fed stance.
The rupee closed almost flat at 65.76 against the US dollar on some demand for the American currency from banks.
The domestic currency had lost 15 paise to close at 63.82 on Wednesday.
Weakness of the dollar against other currencies overseas gave the rupee more muscle.
The rupee had recovered by 8 paise to close at 66.91 in Tuesday's trade.
The dollar index was down 0.01 per cent at 95.86 against a basket of six currencies in early trade
Persistent dollar demand from banks and importers on the back of a higher dollar in the New York market mainly affected the rupee.
The dollar was firm against some global currencies which also weighed on the rupee.
