Mumbai: Heightened uncertainties over an impending Fed rate hike dragged the Indian rupee to below 67-mark, a 27-month low against the greenback amid strong overseas sentiment.
The domestic unit resumed sharply lower at 67.09 per dollar from weekend's close of 66.88 at the Interbank Foreign Exchange market on the back of frantic dollar demand and weakened further to 67.12 in mid-afternoon trade before ending at 67.09, revealing a fall of 21 paise, or 0.31 per cent. It briefly climbed a high of 66.95 during the intra-day trade.
Concerns related to capital outflows in the aftermath of the first interest rate hike in nearly a decade predominantly weighed on the rupee trade.
However, a smart rebound in local equities which largely shrugged off the potentially negative impact of higher rates against the backdrop of encouraging macroeconomic environment capped the rupee's losses to some extent.
In worldwide trade, the dollar was trading broadly higher against the other major currencies as markets turned their attention to the Federal Reserve's policy meeting this week amid mounting expectations for a rate hike.
While the dollar buoyancy has pressured global currencies this year, but the rupee is still one of the best-performers among the emerging-market currencies due to India's feel-good factor story, a forex dealer said.
The home currency has largely held its ground against the dollar, falling just 5.90 per cent since the start of the year. On the macro-front, country's industrial growth surpassed expectations during October, surging 9.8 per cent to a five-year high after a robust 7.4 per cent second quarter GDP figure.
While the Wholesale Price Index-based inflation moved up to (-)1.99 per cent in November, easing deflationary trend. The dollar index, which tracks the world's reserve currency against a basket of its peers, is up 0.16 per cent at 97.77.
Meanwhile, brushing aside global volatility, the stock market flagship index Sensex rebounded over 106 points to end at 25,150.35.
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