Rupee falls for third consecutive session against US dollar

NEW DELHI: Continuing its fall for the third consecutive session, the rupee depreciated by 18 paise to 66.06 against the US dollar on Wednesday. The domestic currency had fallen 15 paise against the greenback to close at 65.88 in the previous session on sustained dollar demand from banks and importers.

Earlier on Wednesday, the Chinese flash manufacturing PMI reading for September came in at 47, lower than the estimate of 47.3. The People’s Bank of China has set the midpoint rate of yuan at 6.3773 per dollar prior to the market opening, weaker than the previous fix of 6.3721. This was the weakest reference rate the Chinese central bank has set since August 31.

The Chinese President said there was no basis for continuous depreciation of yuan.

But concerns over Chinese economy weighed on global equities. Most emerging markets were down on weak global economic outlook, and foreign outflow concerns. The outflows, if any, may weigh on the Indian currency as well. The dollar index, which tracks dollar movement against a basket of six major world currencies, stood at 96.28.

Atlanta Federal Reserve President Dennis Lockhart on Monday said the six weeks until the Fed's next meeting in October may not be enough time to quell concerns about the global economy and possible risks to the US recovery.

Nonetheless, chances are bright that the US Fed may start hiking interest rates in December. In a poll by Reuters, economists assigned 60 per cent probability of a rate hike happening in the December policy review. As many as 72 of 93 forecasters polled between Friday and Tuesday picked December as the most likely month, Reuters said in a report.