The rupee was trading weak by 13 paise at 62.68 against the dollar at 4.20 pm local time due to dollar's strength against other currencies overseas.
The dollar hit an eight-year high versus the yen and scaled a near 12-year peak against the euro on Tuesday, as the underlying theme of monetary policy divergence held sway.
The dollar received a firm boost late last week as a strong US jobs report helped cement expectations that the Federal Reserve will raise interest rates as early as mid-year.
After falling to a fresh two-month low of Rs 62.80 in early trade at the Interbank Foreign Exchange market, the domestic unit hovered in the range of 62.61 and 62.81 in the afternoon deals.
Dealers attributed the fall in rupee to dollar’s gains against other currencies overseas and a weak domestic equity market.
Rupee down at 62.7 due to dollar index surging close to 98. Will help our exports.
— lokeshwarri sk (@lokeshwarri)
March 10, 2015Besides, increased demand for the American currency from importers too weighed on the rupee, they said.
The rupee had lost 39 paise to close at a two-month low of 62.55 against the American currency yesterday after better-than-expected jobs data spurred expectations of an early hike in US interest rates.
The REER of the rupee based on 6 countries is at 124 and 36-countries at 111 shows that there is ample room for rupee to fall further
— lokeshwarri sk (@lokeshwarri)
March 10, 2015Meanwhile, the benchmark BSE Sensex ended the session down by 134.91 points or 0.47 per cent at 28,709.87.