Rupee depreciates by 11 paise at 66.82 against US dollar

The currency touched a high and low of 67.03 and 67.07 respectively.

The Indian rupee opened lower by 10 paise at 66.82/$ in early trade on Tuesday. On the global front, Euro has firmed, responding to the European Central Bank's latest policy easing measures. ECB has cut its deposit facility rate to  ‐0.3% from  ‐0.2% and extended the monthly bond buying programme till March 2017. Market participants were surprised as the central bank did not increase the quantum of government bonds it buys each month. There was an expectation that the central bank will do more in order to avert the Euro region from the pangs of deflation. However, ECB is of the opinion that extension of QE and the re‐investment of principal will suffice. Meanwhile, the focus will be accentuated on US Fed policy meeting next week. Strong employment numbers in US has reinforced the perception of a rate hike in December. In this respect, US non‐farm payrolls were reported at better than expected at a solid 211,000. Unemployment rate remained steady at 5%. Effectively, Fed Forward rate curves suggest 79% probability of 25 basis points move on the rates. The volatility will increase as we move towards December 16th.

On Monday, Indian rupee ended at 66.72/$, higher by 2 paise from its previous close of 66.70/$ on Friday. The currency touched a high and low of 67.03 and 67.07 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.62 and for Euro stood at 72.40 on December 07, 2015. While, the RBI’s reference rate for the Yen stood at 54.05, the reference rate for the Great Britain Pound (GBP) stood at 100.6524.