Home / Market / Stock-market-news /  Rupee falls 0.83% against dollar ahead of Fed meet

Mumbai: The Indian rupee weakened on Tuesday as investors stepped up their dollar purchase to take advantage of a strong rupee.

The currency ended trading at 63.3725 a dollar, down 0.83% from the previous close of 62.8475. It had opened at 63.3350 and touched a high and a low of 62.9550 and 63.64, respectively.

A foreign bank was seen selling dollars in the market even as the Reserve Bank of India (RBI) was largely absent from the market, according to currency dealers.

“Rupee today (on Tuesday) basically traded the bridge between last Monday’s and Friday’s closure," said a senior currency dealer with a foreign bank.The Indian currency had strengthened 1.03% on Monday.

The currency market was also wary of the two-day meeting of the US Federal Reserve where crucial decision about the winding down of its assets purchase programme will be taken.

“There is a good resistance at 64.20 level, if rupee manages to resist that level, rupee may touch 61, as per technical charts," said the dealer, who declined to be named as he was not authorised to speak to the media.

Since January this year, the rupee has weakened 13.22%.

Aman Mahna, a dealer at FirstRand Bank Ltd, said he expects trade to remain thin between now and Thursday, till the Fed’s decision becomes clear.

“Even the Reserve Bank of India policy is based on what the Fed will do. If the Fed says that they will prune the bond buying by $5 billion to $10 billion, then I think the market can adjust to that. Cutting the bond buying is imminent but all eyes are on how much they cut it by," Mahna said.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 81.155, down 0.18% from the previous close of 81.295.

BSE’s benchmark Sensex rose 0.31% to 19,804.03.

The yield on the 10-year bond was at 8.446% against its previous close of 8.436%.

The interbank call money rate ended at 10.25%.

Anup Roy contributed to this story.

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