Rupee trades lower at 66.58 against US dollar

Mumbai: The Indian rupee on Wednesday weakened against the US dollar, tracking the losses in the local equity and Asian currencies markets.

At 2.03pm, the home currency was trading at 66.58, down 0.22% from its previous close of 66.43. The rupee opened at 66.63 a dollar and touched a low of 66.65, a level last seen on 25 April.

India’s benchmark Sensex index fell 0.32% or 82 points to 25,147.71. The index fell in four out of five sessions. Since 27 April, Sensex fell over 3.5% or 900 points. So far this year, Sensex is down 3.8%.

Asian currencies slid on broad dollar strength after regional US Federal Reserve chiefs suggested interest rate hikes could restart in June.

Malaysian ringgit was down 1.28%, South Korean won 1.24%, Indonesian rupiah 0.55%, Philippines peso 0.49%, Thai baht 0.47%, Taiwan dollar and Japanese yen were down 0.4% each, Singapore dollar 0.14% and China renminbi fell 0.11%.

Two prominent members of the US Fed’s Open Market Committee said overnight that they intend to support an interest rate hike in June, six months after the US central bank raised rates for the first time in a decade.

Atlanta Fed president Dennis Lockhart said on Tuesday that the Federal Open Market Committee could move on rates in June, if warranted, though he is not leaning in either direction at this point. San Francisco Fed president John Williams said that he would support a rate hike next month, Bloomberg reported.

The weak manufacturing data in China and the UK also raised worries over slowing growth among traders.

India’s 10-year bond yield was trading at 7.439%, as compared with its Tuesday’s close of 7.442%.

So far this year, the rupee has weakened 0.63%, while foreign institutional investors have bought $1.85 billion from the local equity market and sold $165.10 million in debt markets.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 93.227, up 0.31% from its previous close of 92.944.