Bombay:
The rupee depreciated 12 paise on Friday to close at 82.82 against the US currency as a stronger overseas greenback and a subdued trend in domestic stocks weighed on investor sentiment.
The outflow of FIIs from capital markets also negatively impacted rupee sentiment, while weak crude oil prices provided some support for the unit, which posted its fourth consecutive week of decline.
In the interbank foreign exchange market, the rupee opened at 82.77 against the greenback and eventually settled at 82.82, down 12 paise from its previous close of 82.70.
During the session, the domestic unit witnessed an intra-day high of 82.73 and a low of 82.85 against the US dollar.
On a weekly basis, the rupee fell 24 paise in its fourth consecutive week of losses against the dollar.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, was up 0.59 percent at 104.47.
The global oil benchmark Brent oil futures fell 1.75 percent to USD 83.65 a barrel.
According to Anuj Choudhary, research analyst at Sharekhan by BNP Paribas, the Indian rupee depreciated due to risk averse sentiment in global markets and a strong US dollar.
“The dollar strengthened as robust US economic data raised expectations that the US Federal Reserve could keep interest rates higher longer to contain inflation,” Choudhary said.
Choudhary further noted that “we expect the rupee to trade with a negative bias towards a strong dollar and weak domestic markets.
“However, weak crude oil prices and fresh FII inflows could prevent a sharp fall in the rupee. USDINR spot price is expected to trade between Rs 82.40 and Rs 83.30,” said Choudhary.
According to Dilip Parmar, Research Analyst, HDFC Securities, the Indian rupee marked its fourth straight weekly decline following aggressive comments from Federal Reserve members supporting dollar bulls.
However, the rupee outperformed relatively among Asian currencies thanks to central bank intervention.
The local unit managed to hover above 83 for the time being thanks to domestic equity bargains by foreign institutions.
While the rupee manages to stay above 83, it could be difficult to hold it for long amid the greenback’s broad strength. Technically, spot USDINR has resistance at 83.10 and support at 82.30 Parmar said.
Jateen Trivedi, VP Research Analyst at LKP Securities said the rupee was trading weak on fears of rising interest rates in the US, pushing the dollar above $104.25.
The 30-stock BSE Sensex ended 316.94 points or 0.52 percent lower at 61,002.57, while the broader NSE Nifty fell 91.65 points, or 0.51 percent, to 17,944.20.
Foreign institutional investors (FIIs) were net sellers in the capital markets on Friday as they sold shares worth Rs 624.61 crore, according to exchange data. PTI DRR MR MR
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