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.
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