Rupee trims initial losses; still down 6 paise at 61.94..

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In line with equity market, the Indian rupee trimmed its initial losses against the American currency but was still quoted lower by 6 paise to 61.94 per dollar at the Interbank Foreign Exchange (Forex) market here today. The rupee resumed lower at 61.96 per dollar against yesterday’s closing level of 61.88 per dollar and moved down further to 61.97 per dollar on initial dollar demand from importers.

However, it recovered marginally and was quoted at 61.94 per dollar at 12 noon. It hovered in the range of 61.91-61.97 per dollar during the morning trade. In New York, the US dollar weakened against its major rivals yesterday despite more indicators of weak economic growth outside the US, as a sell-off in global equities forced investors to book profits elsewhere.

Crude oil prices fell in Asia today as dealers await the latest US supply report for clues about production levels, while weak Chinese and German trade data also weighed, analysts said. US benchmark West Texas Intermediate for January delivery slipped 90 cents to $62.92, while Brent crude for January was down $1.01 at $65.83 in mid-morning trade.

Meanwhile, India’s CAD – a measure of the country’s external vulnerability – rose to 2.1 per cent of GDP in the second quarter from 1.7 per cent in the first quarter. According to dealers, the widening current account deficit and dollar demand from importers had hurt the sentiment for rupee.

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