The rupee drifted lower against the dollar on the money market on Wednesday in process of trading, dealers said. The rupee lost 20 paisas versus the dollar for buying and selling at Rs 160.75 and Rs 160.80.
In the third Asian trade, the euro slipped to a two-month low on Wednesday, as markets waited to gauge the European Central Bank's stance on policy amid bubbling expectations that it could eventually lower interest rates and join the global easing trend.
The common currency was 0.05% lower at $1.1145 after touching $1.1143, its lowest since May 31. It had already lost more than 0.5% the previous day and shed nearly 0.7% so far this week.
The euro's decline has quickened ahead of the ECB's policy meeting on Thursday. While markets have pared their bets the central bank would cut rates by 10 basis points, they still expect dovish guidance, paving the way for easing in September.
The dollar index edged up to a five-week high of 97.755, following gains of nearly 0.5% the previous day.
The dollar was trading against the Indian rupee at Rs 69.040, the greenback was at 4.119 in terms of the Malaysian ringgit and the US currency was available at 6.883 versus the Chinese yuan.
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Open Bid Rs 160.30
Open Offer Rs 160.80
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Bid Rate Rs 160.75
Offer Rate Rs 160.80
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According to currency dealers, the short supply phenomenon of the greenback prevailed throughout the trading session which helped its appreciation for buying and selling at Rs 160.10 and Rs 160.75 against the overnight closing rates of Rs 159.50 and Rs 160.40 respectively.
Similarly, the local currency also followed the suit in relation to the pound sterling. The pound's buying and selling rates rose from the Tuesday's closing of Rs 198.55 and Rs 199.60 to Rs 199.50 and Rs 200.40 respectively, they added.
The dollar opened at Rs 160.80 (buying) and Rs 160.90 (selling) against last rate of Rs 160.70 (buying) and Rs 160.80 (selling). It closed at Rs 160.80 (buying) and Rs 160.90 (selling).
The buying and selling rates of one tola of gold remained unchanged at Rs 83,900 (selling) and Rs 83,600 (buying) in the local Sarafa (gold) markets of Rawalpindi and Islamabad.