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Rupee ends weaker despite strong gains in equity

03 Jul 2017 Evaluate

Starting the new month on a weak note, Indian rupee extended losses and ended considerably weaker against US dollar on Monday, on account of selling of American currency by banks and exporters. Sentiments remained subdued with report that the growth of eight core sectors slowed to 3.6% in May, as against 5.2% in May last year, due to fall in output of coal and fertiliser. Also, activity in India’s manufacturing sector eased to a four-month low of 50.9 in June, as against 51.6 in the month of May, amid a slowdown in output and new orders as softer domestic consumption partly offset strong foreign demand. Besides, firm dollar against a basket of other currencies overseas too added pressure on the domestic unit. On the global front, pound fell for the first time in nine days against dollar after UK manufacturing expanded at a slower pace in June than forecast. The IHS Markit’s Purchasing Managers Index for manufacturing dropped to three-month low of 54.3 in June from a 56.3 in May.

Finally, the rupee ended at 64.87, 30 paise weaker from its previous close of 64.57 on Friday. The currency touched a high and low of 64.90 and 64.62 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 64.75 and for Euro stood at 73.85 on July 03, 2017. While the RBI’s reference rate for the Yen stood at 57.54, the reference rate for the Great Britain Pound (GBP) stood at 84.17. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

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