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Our Bureau

Mumbai, Aug. 26 The forex market saw choppy and volatile movement with the rupee breaching the psychologically important level of 44 to a dollar.

The rupee was expected to weaken, as other Asian currencies also weakened against the greenback and the demand for the dollar exceeded the supply, said forex dealers.

The rupee opened at 43.93/95 and closed at 43.85/86, about eight paise lower from the previous close of 43.77/78. During the day, it touched a low of 44.16 and a high of 43.78. Today’s low is a new low since March 2007, said dealers.

A big corporate started buying dollars at around 44.06/07, which pushed the rupee down to 44.16. At that level nationalised banks started selling dollars, which helped the rupee to recover.

The selling may have been on account of the RBI stepping in to curb the volatility, said the chief forex dealer with a private bank.

Though oil prices fell to $114 for a barrel, oil companies were active in the market as they bought dollars in order to hedge.

The rupee is likely to remain volatile and the next support level for the rupee could be at 43.80. “We are seeing bearishness across currencies. When all major currencies have taken a beating against the US dollar, why will the rupee alone be spared?” said a forex dealer with a private bank.

In the global market the dollar touched a six-month high against the euro.

The forward premia opened lower, but then moved up due to profit taking and closed almost unchanged.

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