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Rupee falls below 51 level on strong dollar demand

Mumbai: The rupee today lost 39 paise to close below the 51-level against the US currency due to fresh dollar demand from importers and weakness in stock markets. Snapping its two-day gaining streak, the rupee settled at 51.11/12, down by 39 paise, or 0.77 per cent, over the previous close. In last two days, it had risen by 68 paise, or 1.32 per cent. Dealers said fresh dollar demand, mainly from oil importers, and firm global cues weighed on the rupee.

"The rupee fell back on strengthening dollar and weak Indian balance of payments numbers. The dollar strengthened on dampening comments from the US Federal Reserve about its monetary easing programme which witnessed diversion of funds towards safer heaven avenues," Alpari Financial Services (India) CEO Pramit Brahmbhatt said. "The dollar index which has been falling over past few sessions is expected to add some more gains pushing the Rupee towards its latest low of 51.60 and 51.70 levels," he added.

The dollar index was up by nearly 0.4 per cent against a basket of currencies after US Federal Reserve minutes showed more asset purchases were unlikely. At the Interbank Foreign Exchange (Forex) market, the local unit hovered in a range of 50.85-51.23 before settling for the day at 51.11/12.

Foreign Institutional Investors (FIIs) infused USD 326.70 million in straight three straight days since March 30, 2012, as per Sebi data. Meanwhile, the BSE benchmark index Sensex closed down by 111.40 points at 17,486.02. New York crude oil was trading just above USD 103 a barrel in European market today.

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