The rupee fell 25 paise to close at 82.62 against the US currency on Thursday, weighed down by a strong greenback in the overseas market and a negative trend in domestic equities.At the interbank foreign exchange, the domestic unit opened at 82.36 against the dollar, and finally settled at 82.62, down 25 paise from its previous close.During the day, the rupee touched a high of 82.35 and a low of 82.66 against the greenback.On Wednesday, the rupee had settled at 82.37 against the dollar.
According to Jateen Trivedi, VP Research Analyst at LKP Securities, this depreciation can be attributed to several factors — the strength of the American currency, rise in crude oil prices and muted domestic equities.”The rupee’s trading range is currently expected to be between 82.35 and 82.75. These factors collectively indicate a fall in the rupee to continue,” Trivedi said.The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.21 per cent to 103.10.Brent crude futures, the global oil benchmark, advanced 0.66 per cent to USD 76.45 per barrel.
Anuj Choudhary – Research Analyst, Sharekhan by BNP Paribas said the rupee depreciated as the US Dollar rose to a seven-week high amid optimism over debt ceiling talks.Overnight gains in crude oil prices also weighed on the domestic currency.The US Dollar gained on optimism as US President Joe Biden and House Speaker Kevin McCarthy are working to reach a deal to avoid a default. Upbeat housing starts data from the US also supported the American currency, Choudhary said.
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“We expect the rupee to trade with a negative bias on underlying strength in the US Dollar. However, improved global risk sentiments on optimism that debt ceiling talks will get resolved may support the rupee at lower levels,” Choudhary added.On the domestic equity market front, the 30-share BSE Sensex closed 128.90 points or 0.21 per cent lower at 61,431.74 points. The broader NSE Nifty declined 51.80 points or 0.28 per cent to 18,129.95 points.Foreign Institutional Investors (FIIs) were net buyers in the domestic capital market on Thursday as they purchased shares worth Rs 970.18 crore, according to exchange data.
The Indian rupee tumbled to the lowest level since March 21 amid weakness in the Chinese Yuan and the absence of the central bank’s intervention, said Dilip Parmar, Research Analyst, HDFC Securities.”We believe local units to start outperforming as strong economic data and dollar inflows are backing for strength while the RBI is in favour of stable and range-bound currency,” Parmar said.Parmar further added that the “strength in the dollar index and weaker Asian currencies could weigh on the rupee but we could see median performance among regions”.
