Rupee trades lower against US dollar

Snapping its two-day winning streak, the rupee fell by 8 paise to 64.90 against the US dollar in early trade on Friday. The domestic currency had closed 21 paise higher at 64.82 against the greenback in the previous session on sustained dollar selling by banks and exporters.

The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, stood at 94.51. While evidence is mounting that economic growth is cooling in the US, much of the slowdown appeared to be due to temporary factors, New York Fed President William Dudley said in a speech overnight.

Dudley said a strong dollar was also playing a role, but the economy still seemed to be growing at a healthy clip.

India Ratings expects the rupee to trade in the range of 64.50-66.25 against the US dollar for the remainder of 2015.

However, the readjustments carried out by foreign institutional investors in their portfolios towards the year-end and beginning of 2016 may cause some short-term volatility in the domestic currency, the rating agency said in a note.

"The key reasons for expecting stability in the rupee better macroeconomic fundamentals of the Indian economy among the emerging economies, comfortable balance of payment situation, postponement of policy normalisation by US Fed to December 2015 or maybe to 2016 and healthy capital inflow," Ind-Ra said.

The domestic foreign exchange data will be released during the day. In the US, data on factory output numbers scheduled for release later in the day will be tracked keenly.