Mumbai:
The rupee failed to sustained its recovery and depreciated 8 paise to close at 86.87 (provisional) against the US dollar on Wednesday due to a firm American currency and unending outflow of foreign funds.
According to forex traders, rupee stayed firm initially but lost grounds amid volatile domestic equity markets that also added to the trend of withdrawal by foreign institutional investors.
They said the easing crude oil prices supported the Indian currency at lower level but at the same time the currency markets saw muted participation awaiting cues from the inflation and industrial output data to be released by the government.
At the interbank foreign exchange, the rupee opened at 86.44 and moved between the high of 86.36 and the low of 86.91 against the greenback during intra-day. The unit ended the session at 86.87 (provisional) against the dollar, registering a fall of 8 paise from its previous close.
On Tuesday, the rupee appreciated 66 paise, logging the maximum single-day gain since March 3, 2023, to close at 86.79 against the US dollar.
The steep surge came a day after the unit plunged to near 88 per US dollar-level during intra-day on Monday, though the currency ended the session with gains at 87.45 against the greenback.
Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee rallied in early trades on intervention by the Reserve Bank of India. However, it lost gains on a weak tone in the domestic markets and a recovery in the US dollar index.
Choudhary said the rupee is expected to trade with a negative bias amid weakness in the domestic equities and persistent FII outflows. “Traders may take cues from inflation data from the US and India. USD-INR spot price is expected to trade in a range of Rs 86.50 to Rs 87.30.” Meanwhile, the US dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.04 per cent higher at 107.87.
The elevated level of dollar index was attributed to escalating trade tensions after the US imposed 25 per cent tariffs on aluminium and steel imports into the country.
Brent crude, the global oil benchmark, dropped 0.92 per cent to USD 76.29 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex declined 122.52 points, or 0.16 per cent, to settle at 76,171.08, while the Nifty fell 26.55 points, or 0.12 per cent, to 23,045.25 points.
Foreign institutional investors (FIIs) offloaded equities worth Rs 4,486.41 crore in the capital markets on a net basis on Tuesday, according to exchange data.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
