Rupee pares early gains, falls to 64.63 as dollar rises
The domestic currency was also weighed down by minor outflows of funds by foreign portfolio investors.
The rupee pared early gains on Tuesday to end 11 paise below its previous close at 64.6288 to the dollar. The weakening was primarily due to the dollar gaining earlier in the session.
The domestic currency was also weighed down by minor outflows of funds by foreign portfolio investors. Dealers said that the India Meteorological Department's prediction of 96 percent rainfall of the long period average too was received negatively by the market.
The dollar gained on comments made by US Treasury Secretary Steven Mnuchin. The dollar index, which measures it against a basket of six currencies, was 0.3 percent lower at 100.00 after having risen to 100.40 during the day.
The rupee has risen by over 5 percent against the greenback in the calendar year so far. The rise has been driven by large inflows of funds by FPIs, both in equity and debt. So far this year, FPIs have bought Rs 86,611 crore of Indian securities.
Meanwhile, the 10-year benchmark bond yield ended at 6.86 percent, around 2 basis points higher than the previous close. Bond yields and bond prices move in opposite directions.Market participants said that the benchmark has now turned relatively illiquid owing to the imminent issue of a new benchmark bond. Most of them see the benchmark bond yield moving between a range of 6.80 percent and 6.90 percent this week.