Rupee falls for 8th day
Declining for the eighth consecutive session, the Indian rupee tumbled 76 paise to close below the 74-mark against the US dollar on Thursday, tracking a strong greenback overseas after the US Federal Reserve surprised the market by signalling rate hikes sooner than expected.
Mumbai: Declining for the eighth consecutive session, the Indian rupee tumbled 76 paise to close below the 74-mark against the US dollar on Thursday, tracking a strong greenback overseas after the US Federal Reserve surprised the market by signalling rate hikes sooner than expected.
At the interbank forex market, the domestic unit opened weak at 73.65 against the American currency, then lost further ground and finally closed at 74.08, showing a fall of 76 paise over its previous close. On Wednesday, the rupee had settled at 73.32. The local unit witnessed an intra-day high of 73.57 and a low of 74.08 against the greenback. The domestic currency has lost 128 paise in the eight trading sessions to Thursday. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.60 per cent to 91.67. "Indian Rupee depreciated amid strong dollar. Further, risk aversion in the global markets and disappointing macroeconomic data added downside pressure," said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas. "Dollar gained strength as US Federal Reserve surprised market by signalling rate hike sooner than expected.
Their median projection showed central bank lifting their benchmark rate to 0.6 per cent from near zero by the end of 2023," Mukadam said. "Further, market participants fear that the second wave of COVID-19 infection in India has dampened the expectation of quick economic recovery. Rupee may trade in the range of 73.25 to 74.15 in next couple of sessions," he added. On the domestic equity market front, the BSE Sensex ended 178.65 points or 0.34 per cent lower at 52,323.33, while the broader NSE Nifty fell 76.15 points or 0.48 per cent to 15,691.40. Brent crude futures, the global oil benchmark, rose 0.12 per cent to USD 74.48 per barrel. Foreign institutional investors were net sellers in the capital market on Wednesday as they offloaded shares worth Rs 870.29 crore, as per exchange data. " A hawkish surprise across a few dimensions from Federal Reserve indicating financial conditions are tightening which pulled dollar and yields higher while dragged stocks lower," said Dilip Parmar, Research Analyst, HDFC Securities.