Ending its two-day rally, the rupee today closed down by 4 paise at 66.75 per dollar due to fresh demand for the US currency from corporates and banks amid capital outflows from stock markets.
forex market sentiment remained cautious and witnessed lethargic trade as currency traders preferred to stay on the sidelines against the backdrop of pre-US election jitters alongside confusing signals from the Federal Reserve.
Heavy capital outflows in the midst of an impending US central bank rate hike amid global volatility largely kept rupee momentum under check.
Traders are nervous at this juncture ahead of the vote on November 8, particularly after recent polls showed Donald Trump gaining ground on Hillary Clinton and the rupee is expected to trade under pressure, a forex dealer commented.
The rupee today resumed a tad lower at 66.72 from Wednesday’s closing value of 66.71 at the Inter-bank Foreign Exchange (forex) market.
But, it staged a remarkable recovery in late morning deals to touch a high of 66.67 following adequate dollar supplies and also supported by weak dollar overseas.
However, the home unit lost momentum in late afternoon trade and slipped to hit a low of 66.77 before settling at 66.75, showing a loss of 4 paise, or 0.06 per cent.
It had appreciated by 16 paise in last two-day rally.