Rupee hits over two-week low on importers’ dollar demand

MUMBAI: The Indian rupee fell to a more than two-week low on Tuesday on the back of dollar purchases by importers and short covering by traders, with a rise in U.S. yields also adding to the pressure.
The rupee ended at 82.0375 per U.S. dollar, compared with its close of 81.7950 in the previous session.
The demand for dollars might be due to purchases by importers, said Anand James, chief market strategist at Geojit Financial Services.
An uptick in the USD/INR was brewing, with the 81.6 support level having held firm for the last two weeks, James said.
A possible covering of dollar short positions in the wake of the Reserve Bank of India’s intervention may be another reason for the dollar’s surge, traders said.
The dollar index inched up as traders awaited clarity on U.S. debt ceiling talks and new inflation data for a clearer picture of the economic outlook and the Federal Reserve’s likely rate-hiking path.
Other Asian currencies edged lower as Treasury yields rose ahead of U.S. inflation data on Wednesday. The data is critical after the Federal Reserve, last week, signalled a pause in rate hikes.
India’s inflation data, due later in the week, will provide cues on the RBI’s next rate hike moves.