Rupee Falls 8 Paise Against US dollar

The rupee depreciated 8 paise to close at 83.08 against the US dollar on Tuesday, as a strong greenback against major currencies overseas and rising crude oil prices dented investor sentiments.

However, a rally in domestic equities and fund infusion by foreign investors supported the domestic unit and restricted the fall, forex traders said.

At the interbank foreign exchange, the rupee opened at 83 against the dollar and touched an intraday high of 82.98 and a low of 83.08.

The rupee finally settled at 83.08, a decline of 8 paise against its previous close.

On Monday, the rupee appreciated 7 paise to close at 83 against the US dollar.

“We expect the rupee to trade with a slight positive bias on positive Asian markets and fresh foreign inflows. However, positive tone in the greenback and rising crude oil prices may cap sharp gains,” said Anuj Choudhary Research Analyst, Sharekhan by BNP Paribas.

Escalation of geopolitical tensions in the Middle East after Israeli forces launched airstrikes in Rafah may also weigh on riskier currencies.

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“Traders may take cues from US inflation data. US CPI is expected to cool down to 2.9 percent from 3.4 percent in the previous month, while core CPI is likely to cool down to 3.7 percent from 3.9 percent. USD/INR spot price is expected to trade in a range of Rs 82.80 to Rs 83.20,” Choudhary said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.05 percent higher at 104.21, ahead of the US inflation report.

Brent crude futures, the global oil benchmark, rose 0.85 percent to USD 82.70 per barrel.

In the domestic equity market, the 30-share BSE Sensex closed 482.70 points or 0.68 percent higher at 71,555.19 points. The broader NSE Nifty advanced 127.20 points or 0.59 percent to 21,743.25 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Tuesday as they purchased shares worth Rs 376.32 crore, according to exchange data. The foreign investors’ equity buying kitty touched Rs 13,404.37 crore.

Meanwhile, India’s industrial production growth slowed to 3.8 percent in December 2023, mainly due to poor performance of mining and power generation segments, according to official data released on Monday.

Retail inflation declined to a three-month low of 5.1 percent in January, mainly due to subdued prices of vegetables, fruits, and other food items, according to government data released on Monday.

Source: PTI