Rupee weakens but back below 70 per US dollar1 min read . Updated: 22 Dec 2018, 01:04 AM IST
After dropping to 70.07 a dollar today, the rupee pared some losses and was back below 70/USD
The rupee today weakened past the 70 a US dollar mark but pulled back in later trade. The rupee opened lower at 69.93 against the dollar. At 2.22pm, the rupee traded at 70.27 a dollar, down 0.82% from its previous close. Weak domestic equity markets and higher crude oil prices weighed on sentiment. On Thursday, the rupee had closed at 69.70 against the US dollar, after rising 69 paise. After a muted opening, the Sensex dropped sharply and was recently trading nearly 400 points lower amid broad-based selling pressure.
Besides weak equity markets, traders said rising crude prices and foreign fund outflows put additional pressure on rupee. Foreign funds pulled out ₹ 386.44 crore from the capital markets on a net basis, while domestic institutional investors bought shares worth ₹ 87.96 crore on Thursday, according to provisional data.
Crude oil prices edged higher today on reports that production cuts by OPEC might be larger than first thought. US crude eked out a 61 cent bounce to $46.49 a barrel, while Brent rose 69 cents to $55.04. Both Brent and US crude futures had reached their lowest in more than a year overnight.
On Thursday, Bank of England said Brexit uncertainty had “intensified considerably" over the last month but falling oil prices were likely to push inflation below its 2% target soon, helping to support the economy. The central bank kept its interest rate unchanged at 0.75% as expected.
Most of the global stock markets today traded sharply lower as the threat of a US government shutdown and of further hikes in US borrowing costs hurt the sentiment. The S&P 500 is headed for its worst quarter in almost a decade and the Nasdaq has shed 19.5% from its August peak. Sentiment had turned sour on Thursday when the US Federal Reserve largely retained plans to increase interest rates despite mounting risks to growth.