Rupee slides as broader markets jittery, breaches key level
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The Indian rupee weakened on Tuesday to close just below a key technical level, amid mixed cues from Asian markets and as the dollar index attempted to gain.
The partially convertible rupee eased to 81.72 per dollar, compared to its previous close of 81.390. The currency breached its 100-day moving average of 81.733 late in the session, falling 0.7% in two sessions.
Traders had earlier cited fixing-related dollar demand and stop losses of speculators being triggered after the Reserve Bank of India (RBI) was suspected to be in the market on Monday.
"Oil companies seem to have again started buying dollars and keeping USD/INR well bid, also the dollar index has crossed the 102 level after getting support at 101.50," said Anil Bhansali, head of treasury at Finrex Treasury Advisors.
Broader Asian currencies and stock markets were both choppy through the day, Bhansali added.
The Indonesian rupiah rallied 1.2% and the offshore Chinese yuan slipped, while most regional markets remained shut for the Lunar New Year holidays.
The dollar index staged a small rebound after UK business activity disappointed, and pressured the rupee.
Domestic traders also said they were keeping a watch on oil prices as they steadily climbed to $88 per barrel. [O/R]
Meanwhile, a dealer at a private bank indicated rupee premiums would remain rangebound till key central bank events like the U.S. Federal Reserve meeting next Wednesday and the RBI rate decision on Feb. 8 were out of the way.
Money market traders see only two more quarter-point rate hikes by the Fed and a peak of around 5% by June.
($1 = 81.5100 Indian rupees)
