Rupee hits over two-week low on importers’ dollar demand

MUMBAI: The Indian rupee fell to more than two-week lows on Tuesday on dollar buying by importers and short coverage by dealers, with a rise in US yields also adding to the pressure.
The rupee closed at 82.0375 per US dollar compared to its close of 81.7950 in the previous session.
Demand for dollars could be due to buying from importers, said Anand James, chief market strategist at Geojit Financial Services.
An uptrend in USD/INR was brewing, with the 81.6 support level holding steady for the past two weeks, James said.
A possible covering of dollar short positions after the Reserve Bank of India’s intervention could be another reason for the dollar’s rise, traders said.
The dollar index inched higher as traders awaited clarity on US debt ceiling talks and fresh inflation data to give a clearer picture of the economic outlook and likely Federal Reserve rate hike path.
Other Asian currencies fell as US Treasury yields rose ahead of US inflation data on Wednesday. The data is critical after the Federal Reserve signaled a pause in rate hikes last week.
India’s inflation data, due later in the week, will provide clues on the RBI’s next rate hike moves.

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