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The rupee wiped off its losses and was trading a tad strong at 64.79 as the dollar buckled against the yen on Friday as tensions simmered on the Korean peninsula.
But the sharp divergence between US and Japanese monetary policy kept the greenback on track for a winning week against the yen.
The dollar dropped as much as 0.8 per cent to 111.65 yen, before recovering to trade down around half a per cent on the day at 111.96 yen in early London trade.
The rupee resumed lower at 64.97 per dollar against yesterday’s closing level of 64.81 per dollar at the Interbank Foreign Exchange (Forex) market today. Later, it fell sharply to 65.15 on heavy dollar demand before paring losses to trade at 64.79 at 4.40 pm local time.
According to forex dealers, persistent FII outflows amid expectations of one more rate by the US Federal Reserve has put pressure on the rupee.
As per provisional exchange data, FPIs withdrew over Rs 1,200 crore on net basis from stock markets yesterday. Overseas, the US dollar was largely lower against the basket of currencies in early Asian trade.
Meanwhile, the 30-share BSE index Sensex ended lower by 447.60 points or 1.38 per cent at 31,922.40 as the government's plan for $7.7 billion stimulus spending raised concerns over fiscal deficit.
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