A coincident as it may seem that the rupee lost 14 paise against a dollar to close at 40.01/02 on the day of Budget, which proposed to hike the short-term capital gains tax which, traders said, has the potential to douse capital inflows and stem appreciation of local currency.

The local currency ended above the crucial 40-mark on Friday for the third time in 10 days.  The local currency moved widely in a range of 40.03 and 39.82 during the day after resuming weak at 39.94/95 a dollar from its previous close of 39.87/88 a dollar.Forex dealers said even a sliding dollar, which hit a fresh record low against the euro in overseas markets, failed to mollify the rupee sentiment.

Fresh low

The US currency touched a fresh low against its major rivals after the US poor jobs data and the Fed chief Ben Bernanke’s testimony, providing little to offer relief to recession and indicating another rate cut shortly. Dealers said initial heavy dollar selling by foreign banks and weakness in dollar overseas helped the rupee recover.