Rupee falls 3 paise against US dollar on surging crude
Mumbai, (PTI): The rupee settled 3 paise lower at 83.28 against the US dollar on Wednesday, tracking negative cues from domestic equity markets amid surging crude oil prices overseas.
However, fresh foreign capital inflows and a weak greenback against major rivals overseas favoured the rupee and restricted the loss, forex traders said.
At the interbank foreign exchange, the domestic unit opened at 83.24 against the dollar and traded in a narrow range of 83.23 to 83.28. It finally settled at 83.28, registering a loss of 3 paise over its previous close.
On Tuesday, the rupee settled at 83.25 against the US dollar.
Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said the rupee declined amid weak domestic markets and a jump in crude oil prices.
"However, the softening of the US dollar cushioned the downside. The US dollar softened as US President Joe Biden landed in Israel raising expectations that the Hamas-Israel conflict may get contained.
"This waned safe-haven demand for the US dollar. Dovish comments from US Federal Reserve officials also weighed on the greenback. Economic data from the US on Tuesday topped forecasts as retail sales and industrial production were better than market expectations," he said.
"USD-INR spot price is expected to trade in a range of Rs 82.90 to Rs 83.60."
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.05 per cent to 106.20.
Brent crude futures, the global oil benchmark, witnessed a sharp rise of 3.05 per cent to USD 89.30 per barrel.
The Reserve Bank of India (RBI) appears to be actively intervening to prevent significant depreciation. Also, the weakness in the dollar provided some support to the rupee, Jateen Trivedi, VP Research Analyst at LKP Securities, said.
"Indian capital markets have seen substantial selling pressure, potentially due to a combination of global and domestic factors. Overall, the rupee remains weak in the near term, although RBI's intervention continues to provide some stability," Trivedi said.
On the domestic equity market front, the BSE Sensex closed 551.07 points or 0.83 per cent lower at 65,877.02. The broader NSE Nifty declined 140.40 points or 0.71 per cent to 19,671.10.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday as they purchased shares worth Rs 1,831.84 crore, according to exchange data.
"Foreign banks are buying US dollars, while public sector banks have been selling it. Even as strength in Asian peers provided some relief to the rupee, elevated oil prices continue to linger as a risk factor. Therefore, the rupee is expected to remain under pressure but in a tight range of 83.20 to 83.30 levels," Rinkle Vira, Fundamental Research Analyst, Anand Rathi Shares and Stock Brokers, said.
Let the Truth be known. If you read VB and like VB, please be a VB Supporter and Help us deliver the Truth to one and all.
“Voters were intimidated, threatened,” alleges Uttar Pradesh Cong Chief Ajay Rai
Lucknow: Uttar Pradesh Congress President Ajay Rai on Saturday alleged that the voters were intimidated and threatened by the ruling BJP regime. Rai's remarks came as counting for nine Assembly constituencies in Uttar Pradesh shows a strong performance by the BJP and its ally, the Rashtriya Lok Dal (RLD).
“It was already decided in UP that the BJP is fighting the elections with the help of its machinery. The result of that has come out. All the machinery of the government, from police to administration, was deployed. Voters were intimidated and threatened. This is a complete murder of democracy,” Rai said, as reported by Hindustan Times.
According to latest ECI trends the BJP and its ally, the Rashtriya Lok Dal (RLD) is performing strongly. Out of the nine Assembly constituencies where bypolls were held, the BJP is leading in five seats—Kundarki, Khair, Ghaziabad, Phulpur, and Majhawan. Its ally, the RLD, is ahead in Meerapur. The Samajwadi Party (SP), however, is not far behind, leading in three constituencies: Karhal, Katehari, and Sisamau.
