Rupee closes at six week low against US dollar

The currency opened at 82.65 and touched a low of 82.76. At closing, the rupee settled at 82.74 a dollar.

The rupee closed at a six-week low against the dollar on July 7, tracking losses in Asian currencies as the market adjusted its expectations for potential rate hikes by the Federal Reserve due to robust employment data from the United States.

The currency opened at 82.65 and touched a low of 82.76. At closing, the rupee settled at 82.74 a dollar — a level last seen on May 23, down 0.28 percent from its previous close of 82.51.

".. depreciation was primarily driven by the strengthening of the U.S. dollar, weaker Yuan and stop loss getting triggered which resulted in the unwinding of the carry trade (borrow in the currency where interest rates are lower and invest where rates are higher). The USD bull rally gained even more momentum due to the lack of significant flows and decreased participation from exporters as one-year forward premiums remained at 1.3350, near their lowest levels since 2011," said CR Forex in its note.

The dollar continued to strengthen as concerns arise over China's economic data and the possibility of central banks adopting more dovish stances. The resilience of the US labour market was evident in the latest indicators, with a surge in private hiring, a slowdown in layoffs, and a relatively low number of unemployment benefit filings.

In June, American companies created nearly half a million new jobs, marking the highest monthly increase in over a year. Another report by Challenger, Gray & Christmas Inc revealed that job cuts by US employers reached an eight-month low in June.

Among Asian currencies, Indonesian rupiah was down 0.58 percent, South Korean won declined 0.3 percent, Philippines peso lost 0.28 percent, Taiwan dollar 0.14 percent, Malaysian ringgit 0.13 percent, Hong Kong dollar 0.08 percent. Among gainers, Japanese yen gained 0.68 percent, China Renminbi 0.18 percent, Singapore dollar 0.14 percent.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 103.02, down 0.14 percent from its previous close of 103.17.

(With inputs from Bloomberg)