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regular-article-logo Wednesday, 29 May 2024

Rupee falls 14 paise to close at 83.57 against US dollar

On Monday, the local unit declined 6 paise to settle at 83.44 against the American currency

PTI Mumbai Published 16.04.24, 04:20 PM
Representational image.

Representational image. File

The rupee depreciated 14 paise to close at 83.57 (provisional) against the US dollar on Tuesday, weighed down by a negative trend in domestic equities and a strong greenback against major crosses overseas amid geopolitical tensions.

Forex traders said a weak appetite for riskier assets and recent foreign capital outflows also dragged down the local unit.

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At the interbank foreign exchange market, the local unit opened at 83.51 and finally settled at 83.57 (provisional), registering a loss of 14 paise from its previous close.

On Monday, the rupee declined 6 paise to settle at 83.44 against the US dollar.

According to Anuj Choudhary Research Analyst, Sharekhan by BNP Paribas, the 10-year US bond yields rose to 4.66 per cent, the highest since November 2023. Weak domestic markets and simmering geopolitical tensions too weighed on the rupee.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.02 per cent higher at 106.23.

The US dollar rose to a five-month high, following weak yuan, retail sales and safe-haven demand amid Iran-Israel tensions, Choudhary added.

Brent crude futures, the global oil benchmark, declined 0.40 per cent to USD 89.74 per barrel.

"We expect the rupee to remain weak amid ongoing geopolitical uncertainties which could impact risk currencies and a surge in the US dollar. Rising global crude oil prices and a surge in US treasury yields amid expectations of a delay in rate cut in the US may also pressurise the rupee. Markets will take cues from Israel’s response to the attack by Iran.

"Any further escalation would strengthen the dollar, while any signs of de-escalation would lead to some easing. Traders may take cues from building permits; housing starts and industrial production data from the US. USD/INR spot price is expected to trade in a range of Rs 83.30 to Rs 83.80," Choudhary added.

On the domestic equity market front, Sensex declined 456.10 points, or 0.62 per cent, to settle at 72,943.68 points. The Nifty fell 124.60 points, or 0.56 per cent, to close at 22,147.90 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday as they offloaded shares worth Rs 3,268.00 crore, according to exchange data.

On the macroeconomic front, wholesale inflation in the country rose marginally to a three-month high of 0.53 per cent in March compared to 0.20 per cent in the preceding month due to an increase in prices of vegetables, potatoes, onion, and crude oil.

Moreover, India's merchandise exports dipped marginally in March to USD 41.69 billion, and by 3.11 per cent during the last fiscal year to USD 437.06 billion, mainly due to continued geopolitical turmoil, and depressed global trade.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.

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