Rupee falls 15 paise; closes near two-week low at 82.09 against US dollar
The rupee opened marginally higher against the greenback Thursday amid sustained inflows into the domestic market and a weaker greenback.
PremiumThe Indian rupee fell 15 paise Thursday to close at 82.09 against the US dollar, ending near two-week lows, dragged by broad strength in the dollar index.
Negative sentiments in the domestic equity markets and rising crude oil prices also dragged down the local unit.
Meanwhile, investors traded cautiously awaiting inflation data on the domestic front, slated to be announced on Friday.
The rupee opened marginally higher against the greenback Thursday amid sustained inflows into the domestic market and a weaker greenback.
The local unit opened 4 paise higher at 81.95 against the US dollar as compared to Wednesday's close of 81.99.
During the session, the rupee touched its intra-day high of 81.93 and hit the lowest level of 82.13 against the dollar.
The American currency dropped against its major peers, US yields dropped and US equities rose after the US consumer inflation rate rose by 4.9%, the lowest in two years and marking the tenth straight month of decline.
The month-on-month and the year-on-year core inflation rate rose 0.4% and 5.5%, matching expectations.
Meanwhile, the Indian bencmark equity indices ended marginally lower Thursday. The Sensex eased 0.06% to close at 61,904.52, and the Nifty ended 0.1% lower at 18,297.00.
“The US dollar index fell by 0.20% on Wednesday as the US CPI dropped below the expected 5% mark for the first time since June 2021. The drop in the April CPI to 4.9% knocked the Treasury yields lower and raised the bets that Fed would cut the rates in this year," ICICI Direct said in a note.
“USD/INR is likely to face the hurdle near 82.15 and decline towards the 81.80 as the probability of rate cut towards the second half of the year has increased. US$INR could face the resistance of 50 day EMA at 82.15 and slide towards the immediate support at 81.80. A move below 81.80 would weaken further towards 81.60," it added.
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On Wednesday, the local currency gained 7 paise to close at 81.99 against the US dollar as investors remained on the sidelines ahead of the US inflation data.
Moreover, sustained foreign fund inflows into Indian equities and easing crude oil prices lent support to the rupee.
Foreign Institutional Investors (FIIs) net bought Indian shares worth ₹1,833.13 crore, while Domestic Institutional Investors (DIIs) net sold Indian equities worth ₹789.67 crore on May 10.
(With inputs from PTI)
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