The Indian rupee fell on Wednesday, snapping a three-session winning streak, led by dollar demand from oil refiners and a late fall in the euro.
Global risk sentiment fell after German data showed imports and exports falling and Bank of England governor Mervyn King said there was enormous uncertainty about the euro. Local shares also reflected the global sentiment.
The benchmark index gave up gains to end flat at 17,600.56 after rising as much as 0.7 percent during the session. The rupee saw decent two-way interest in the session, with the unit trading in a 54.9550-55.43 band to the dollar.
Dollar demand from oil refiners continued into the session, while inflows kept a lid on the rupee’s losses. Dealers said that while the rupee will continue to track the euro, the market is also looking at some action from the government as well as the June factory data due Thursday to get a health-check on the economy.
India’s industrial output grew at a slower pace in June, hobbled by weak investment at home because of policy inaction and a drop in export orders from the United States and Europe, a Reuters polls showed on Tuesday.