At 2pm, the rupee was trading at 65.35 against US dollar, down 0.06% from its Wednesday’s close of 65.31

The Indian rupee on Thursday weakened to hit a fresh five-month low against US dollar after surging crude oil prices fuelled concerns about inflation and fiscal slippages.

At 2pm, the home currency was trading at 65.35 against US dollar, down 0.06% from its Wednesday’s close of 65.31. It opened at 65.30 and touched a low of 65.45—a level last seen on 15 November 2017.

“A widening current-account deficit on rising crude oil prices, elevated market volatility and dollar purchases by the central bank are likely to put downward pressure on the rupee,” said Abhishek Gupta, an economist at Bloomberg Economics.

Crude oil prices gained over escalating tensions in Middle East after Europe’s air traffic control agency warned of possible air strikes on Syria in the next 72 hours.

The 10-year bond yield fell marginally to 7.474% from its previous close of 7.542%. Bond yields and prices move in opposite directions.

Traders are also awaiting consumer price inflation and Index of industrial production data due after 5.30pm. According to Bloomberg analysts estimate, CPI will be at 4.2% in March against 4.44% a month ago, and IIP to be at 7% for February, compared to 7.5% in January.

Benchmark Sensex Index rose 0.61% or 205.45 points higher to 34,145.89 points.

So far this year, the rupee has fallen 2%, while foreign investors have bought $1.86 billion and $714.60 million in equity and debt markets, respectively.

source: livemint.com