Mumbai, The rupee registered the third straight session of fall and depreciated 30 paise to close at 86.73 against US dollar on Thursday, weighed down by the strength of the American currency in the overseas markets and rising crude oil prices.
Forex traders said the rupee depreciated for the third consecutive day, logging a loss of 69 paise, primarily due to prevailing risk-averse market sentiment and dollar demand from importers, fuelled by ongoing geopolitical uncertainties.
Moreover, muted domestic equity markets and rising geopolitical tensions in the Middle East also pressurised the rupee, they added.
At the interbank foreign exchange, the domestic unit witnessed heavy volatility. It opened at 86.54 against the greenback and touched an intra-day high of 86.49 and a low of 86.89 against the greenback during the day.
At the end of Thursday’s trading session, the local unit was at 86.73 , down 30 paise over its previous closing price.
On Wednesday, the rupee depreciated 9 paise to close at 86.43 against the US dollar.
“We expect the rupee to trade with a negative bias as rising geopolitical tensions in the Middle East may pressure the domestic currency. Strong US dollar and rising global crude oil prices may also put downside pressure on the rupee,” Anuj Choudhary – Research Analyst at Mirae Asset Sharekhan said, adding that the USD-INR spot price is expected to trade in a range of 86.50 to 87.20.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.02 per cent at 98.92, on safe-haven demand, but momentum remained capped as investors digested the Fed’s reluctance to act decisively.
The US Federal Reserve kept interest rates on hold despite Donald Trump’s demand to cut them by 250 bps.
Brent crude, the global oil benchmark, rose 0.25 per cent to USD 76.89 per barrel in futures trade.
Elevated crude oil prices weighed down on the rupee as higher oil import costs and rising global risk aversion will dent sentiment and widen India’s current account stress, traders said.
In the domestic equity market, the 30-share BSE Sensex declined 82.79 points, or 0.10 per cent, to 81,361.87, while the Nifty fell 18.80 points, or 0.08 per cent, to 24,793.25.
Foreign institutional investors purchased equities worth ₹890.93 crore on a net basis on Wednesday, according to exchange data.
This article was generated from an automated news agency feed without modifications to text.
