Rupee slides to 1-week low against US dollar, down 11 paise

The ongoing trade turmoil between the world's two largest economies, the US and China, continued to roil forex market sentiment.

A marked increase in month-end dollar demand from corporates and importers along with sluggish domestic equities predominantly weighed on the trading front.

Steady capital outflows and a modest rise in crude prices also added some pressure on local currency.

Crude prices strengthened after Canadian production losses and uncertainty over Libyan exports, but rising OPEC supply and intensifying trade conflicts between the US and other major economies largely weighed on trade.

Brent crude futures were trading up at USD 75.15 a barrel in early Asian trade.

At the interbank foreign exchange (forex) market, the Indian unit resumed virtually flat at 68.13, but quickly gained ground to hit a high of 68.07 briefly due to bouts of dollar selling.

The mid-morning recovery was short-lived as rupee succumbed to fresh selling pressure and retreated sharply to touch a session low of 68.26 before ending at 68.24, showing a loss of 11 paise, or 0.16 per cent.

Foreign investors pulled out Rs 538.40 crore from equity markets today, provisional exchange data showed.

Yesterday, the home currency had lost a whopping 29 paise against the US dollar, halting its three-day run.

The RBI fixed the reference rate for the dollar at 68.1676 and for the euro at 79.7425.

The dollar index, which measures the greenback's value against a basket of six major currencies, was up at 94.15.

In the cross-currency trade, the rupee regained some lost ground against the pound sterling to settle at 90.38 per pound from previous level of 90.41.

The local unit, however, drifted further against the euro to settle at 79.66 as compared to 79.58 and also dropped against the Japanese yen to finish at 62.23 per 100 yens from 62.16 on Monday.

In forward market today, premium for dollar edged lower due to heavy receiving from exporters.

The benchmark six-month forward premium payable in October moved down to 98-100 paise from 99.75-101.75 paise and the far-forward April 2019 contract fell to 244.75-246.75 paise from 247-249 paise previously.