The Indian rupee slipped lower in early trades on Monday, 16 January 2017 on increased demand for the American currency from banks and importers.
Dollar's strength against some other currencies overseas and a lower opening of the domestic equity market further weighed down the unit.
The domestic currency opened at Rs 68.25 against the dollar and dipped to a low of 68.2675 before recovering back to a high of 68.21 so far during the day. In the spot currency market, the Indian unit was last seen trading at 68.2150.
On Friday, the rupee fell by 8 paise to close at 68.16 against the US currency on fresh bouts of dollar demand from banks and corporates amid capital outflows.
Domestic benchmark indices edged lower in early trade amid initial volatility sighting lower Asian stocks. At 9:30 IST, the barometer index, the S&P BSE Sensex, was down 28.87 points or 0.11 percent at 27,211.33. The Nifty 50 index was down 9.35 points or 0.11 percent at 8,391.
Overseas, Asian stocks dropped after the British pound plunged more than 1 percent on fears of hard exit by UK from the European Union, which Britain voted to leave last June. In Hong Kong, the Hang Seng Index was down 1.39 percent, while China's Shanghai Composite Index plunged 1.11 percent.
UK Prime Minister Theresa May will reportedly address a speech tomorrow, 17 January 2017, in which many investors believe she could spell out an end to her country's participation in European Union's single market. May is also expected to elaborate on the UK's negotiation priorities in a speech.
Meanwhile, the U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was last quoted up 0.22 percent to 101.39.
Last week, the U.S. dollar fell against the other major currencies on Friday and the dollar index posted its largest weekly decline since late October as optimism cooled over President-elect Donald Trump's economic policy proposals.
However, the Commerce Department reported that retail sales rose 0.6 percentin December, while November's sales were revised up to show a 0.2 percent increase.
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