Rupee falls 7 paise to close at 82.75 against US dollar
1 min read 25 May 2023, 09:08 AM ISTThe dollar index rose to 104 and the 2-year US yield climbed to near 4.40%, both highest in more than two months. Asian currencies fell with the offshore Chinese yuan dropping below 7.08 to the dollar.
PremiumThe India rupee ended 7 paise lower against the US dollar on Thursday, weighed down by the strength of the American currency in the overseas market.
At the interbank foreign exchange, the local unit opened at 82.76 against the dollar, and settled at 82.75 (provisional), down 7 paise from its previous close of 82.68 against the dollar.
During the day, the rupee touched a high of 82.70 and a low of 82.78 against the greenback.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.13% to 104.02.
Meanwhile, Brent crude futures, the global oil benchmark, declined 1.47% to $77.21 per barrel.
“Indian rupee depreciated on weak domestic equities and a strong US Dollar. US dollar has surged to a 10-week high and breached 104 levels on safe-haven demand as the debt ceiling impasse has deteriorated market sentiments. Hawkish fedspeak also supported the greenback," said Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas.
FOMC minutes showed Fed officials were split over support for more rate hikes as some officials were of the view that more tightening may not be needed due to growing pressure from the banking sector. However, some members advocated higher rates to tame inflation as it remained unacceptably high. Also, there were no plans for a rate cut this year.
“We expect Rupee to trade with a negative bias on risk aversion in global markets and a strong US Dollar. The debt ceiling deadlock is worrying the markets as June 1 deadline is nearing. Recovery in crude oil prices over the past few may also weigh on the domestic currency. However, FII inflows may support Rupee at lower levels," Choudhary said.
He expects the USDINR spot to trade between 82.30 to 83.30 in the near term.
Also Read: Stock Market Today: Fag-end buying helps Sensex, Nifty end higher on expiry day for May F&O series
Meanwhile, the Indian benchmark indices ended Thursday’s volatile session higher led by gains in auto, FMCG and realty stocks amid mixed global cues. The Sensex gained 98.84 points, or 0.16%, to close at 61,872.62, while the Nifty ended 35.75 points, or 0.2%, higher at 18,321.15, on the monthly F&O expiry day.
On Wednesday, the Foreign Institutional Investors purchased Indian shares worth ₹1,185.84 crore, while Domestic Institutional Investors bought shares worth ₹300.93 crore, as per the provisional data available on the exchanges.
