Rupee slides 11 paise to 2-year low at 66.84 against US dollar

Rupee down 12 paise to 66.85 versus US dollar

Stretching its downtrend for the fifth straight day, the rupee lost 11 paise to close at two-year low of 66.84 against its US counterpart on consistent dollar demand from banks and importers.

Extreme volatility in domestic equities as well as expectations that the Federal Reserve is on track to raise interest rates for the first time since 2006 predominantly impacted the rupee sentiment.

The robust US macro and jobs report cemented a Fed lift-off this month.

The domestic currency opened substantially lower at 66.85 per dollar from overnight closing level of 66.73 per dollar at the Interbank Foreign Exchange (Forex) due to strong dollar demand in the wake of sustained foreign capital outflows.

However, the home currency recouped its early losses on fresh dollar selling and touched sessions high of 66.7150 before retreating back to conclude at a two-year low of 66.84, revealing a fall of 11 paise, or 0.16 per cent.

It had last ended at 67.07 on September 4, 2013.

On the global front, dollar trded marginally lower against the yen and the euro, but remained broadly stronger against the commodity linked currencies after Chinese exports fell for the fifth consecutive month added to fears over a slowdown in the world s second-largest economy.

The dollar index, which measures the greenback s strength against a trade-weighted basket of six major currencies, eased 0.05 per cent to 98.69.

Meanwhile, financial markets across Asia plunged sharply reacting to a deepening global commodities rout after crude oil prices slumped to fresh six-year low on supply glut fears following news of OPEC s inability to agree on daily quota amid sluggish Chinese trade data.

The stock market flagship index Sensex tanked over 220 points to end at 25,310.33 – its lowest level in three-months, extending the slide to fifth session.