Finance
The rupee fell 32 paise to 82.24 (provisional) against the US dollar on Friday, as international investment outflows resumed and domestic equity markets fell.
An elevated level of crude prices hitting USD 84 per barrel also impacted on the domestic unit, forex traders said, even as the US currency gained momentum on the back of better-than-expected macroeconomic data from the US.
The European Central Bank’s (ECB) dovish tone, which lifted interest rates on Thursday, supported the US dollar.
The local currency opened at 82.30 against the US dollar on the interbank foreign exchange market. During the day, the domestic currency reached a high of 82.19 and a low of 82.34.
The rupee finally settled at 82.24 (provisional), 32 paise lower from the previous close of 81.92 on Thursday.
“Indian rupee fell on Friday on the strong US dollar and weak domestic markets. The surge in crude oil prices further pressurized the domestic unit. The US dollar gained on strong economic data from the US… This provided more room for US Federal Reserve to hike interest rates further. The dovish tone from ECB also strengthened the dollar,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
America’s GDP grew by 2.4 per cent in the April-June quarter, while weekly unemployment claims were lower than forecast.
“We expect the rupee to trade with a slight negative bias on risk aversion in global markets and rising interest rates by most major central banks. A strong dollar and elevated crude oil prices may also put downside pressure on the rupee. However, FIIs remain as net buyers in July, which may support the rupee at lower levels, Choudhary said.
Meanwhile, the dollar index, which measures the strength of the US currency against a basket of six currencies, slipped 0.02 percent to 101.75.
Brent crude futures were trading 0.47 percent down at USD 83.84 a barrel, the global oil benchmark.
On the domestic front, the 30-share BSE Sensex fell 106.62 points, or 0.16 percent, to 66,160.20. The NSE Nifty dropped 13.85 points, or 0.07 percent, to 19,646.05.
According to exchange data, foreign institutional investors (FIIs) were net sellers in the capital markets on Thursday, offloading shares worth Rs 3,979.44 crore.
Source:FE
