Rupee drops to 1-month low, falls below 50-day moving average



By Nimesh Vora

MUMBAI, Dec 6 (Reuters) - The Indian rupee extended its opening decline against the dollar to slip to its lowest level in over a month and below a key level.

The rupee INR=IN was at 82.30 to the U.S. dollar by 9.30 a.m. IST, down from 81.79 in the previous session. The local unit opened at 81.9350 before swiftly falling below the 50-day moving average of 81.98 and the psychological level of 82.

There was probably another round of stop losses triggered once USD/INR moved about 82, a trader said, recalling a possible dividend dollar outflow of a mining company. However, they added "it was difficult to be sure".

"It could be that the news is chasing the price action."

The trader requested anonymity as they are not allowed to speak to the media.

The rupee's weakness was fuelled by the broad decline in Asian currencies after better-than-expected U.S. data brought back the focus on how high U.S. rates will rise in the current cycle. Treasury yields rose overnight and U.S. equities tumbled.

U.S. services industry activity unexpectedly picked up in November. The Institute for Supply Management(ISM) said on Monday its non-manufacturing PMI (Purchasing Managers' Index) increased to 56.5 last month from 54.4 in October.

"With no Fed official citing a smaller 50 basis points hike next week, markets were vulnerable to better-than-expected U.S. data," DBS said in a note.

The dollar index =USD was at 105.28, having reached near 104 at one point on Monday. Asian equities were mostly lower.
Reporting by Nimesh Vora; Editing by Janane Venkatraman

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.