Rupee depreciates 12 paise against US dollar

NEW DELHI: The rupee depreciated 12 paise against the US dollar in trade on Friday following bouts of selling of the US currency by some banks and exporters.

The local unit had opened nearly 9 paise higher, but it fell as the session progressed. It has traded between 66.32 and 66.55 against the greenback so far.

The dollar index, which tracks dollar movement against a basket of six major world currencies, rose to 95.61 ahead of the data on producer price index (PPI) and consumer confidence, slated for release later in the day. The readings may provide hints of whether the US Fed will hike interest rates during its two-day policy meet next week.

The US government reported that the number of Americans filing new applications for unemployment benefits fell last week, a bullish signal about the labor market that bolsters arguments that the Fed will lift rates next week or later in 2015.

But a separate government report, seen as an important inflation reading, showed US import prices falling 1.8 per cent last month as the cost of petroleum and a range of goods dropped. Import prices slid 0.9 per cent in July.

Meanwhile, the domestic currency market will keenly track July factory output numbers scheduled for release post the trading hours.

"As far as the IIP numbers are concerned, we have a very mixed picture that is emerging from the lead indicators. We have a core sector number that has slowed down quite substantially and really been quite uninspiring for the last month and that is particularly because coal output growth has slowed down very sharply after being moderately high over the last several months. That is definitely disappointing," said Aditi Nayar, of ICRA in a recent interview with ET Now.

(WIth inputs from Reuters)