Rupee depreciated 7 paise to 63.54 against US dollar in intraday trade today amid rising hopes of interest rate hikes by the US Fed in coming months.
The domestic unit had snapped a two-week winning streak, slipping eight paise last week, to settle at 63.47 on Friday
Strong inflation and housing data released in the US on Friday pushed the dollar index to a three-month high. The index, which tracks the movement of dollar against a basket of major world currencies, rose to 98.
That said, persistent foreign capital inflows into the equity market has largely cushioned the rupee's fall to an extent, PTI quoted a forex dealer as saying.
Meanwhile, the Reserve Bank of India, which has stockpiled enough dollars to cover more than 10 months of the country's imports, is changing its strategy in the foreign exchange (FX) market, said The Economic Times in a report.
Given that it is in favour of lowering market interest rates, the RBI has bought more dollars in the spot market and dramatically reduced purchases of the US currency in the forward market, the report added.
Source:economictimes.indiatimes.com
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