Rupee trading weak at 66.75

The rupee was trading weak at 66.75 in the evening session as the dollar remained in the driver’s seat on the growing buzz that the US interest rate is set to go up.

The Fed is meeting next week to take a call on this. A higher US rate means flight of investors from emerging markets in search of higher returns.

Apart from the increased demand for the American currency from importers and banks, its strength against other currencies overseas pulled down the rupee.

Also, a weak domestic equity market affected the rupee sentiment.

The domestic unit opened weak by 11 paise at 66.82 at the Interbank Foreign Exchange market today. It hovered in a range of 66.86 and 66.73 before quoting at 66.75, down 4 paise at 3.35 pm local time.

Yesterday, the rupee had weakened 4 paise to 66.71 in a relatively muted trade on renewed demand for the greenback.

The dollar hit a three-week high against the yen on Thursday, on course for a fourth straight day of broader gains after a strong ADP job number in the previous session broke 10-year US government bond yields out of a long-held range.

As the dollar struggled last week to make more progress on the back of a flip in money markets towards a rise in official US interest rates this month, a number of analysts had pointed to muted moves in 10-year yields as one element holding the currency back.

Meanwhile, benchmark BSE Sensex ended marginally higher by 27.19 points or 0.09 per cent at 28,929.13 as traders remained cautious ahead of exit poll results later today.

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