Rupee depreciates 25 paise to close at 83.00 against the US dollar

The Indian rupee depreciated 25 paise against the US dollar on Tuesday weighed down by stronger greenback and surging crude oil prices. The local currency ended at 83.00 a dollar as compared to its previous close of 82.75.

The dollar index, which gauges the greenback's strength against a basket of six currencies, climbed by 0.38% to 104.64.

The rupee has breached the 83-level against the dollar for the fifth time since August 14.

On Monday, the rupee ended 3 paise lower at 82.75 a dollar.

"The rupee depreciated due to strong dollar and weak Asian currencies. Weak global markets and disappointing macroeconomic data from India also weighed on rupee,” said Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas.

The US dollar strengthened on safe haven demand amid risk aversion in global markets while the rupee was under pressure after the latest survey showed India's services activity index declined to 60.1 in August from 62.3 in July.

Read here: India’s services PMI falls to 60.1 in August from 62.3 MoM

"We expect rupee to trade with a negative bias on strong US dollar and elevated crude oil prices. Risk-off sentiments in global markets may also put downside pressure on the local currency.

... any intervention by the Reserve Bank of India may also prevent sharp fall in rupee. USD-INR spot price is expected to trade in a range of ₹82.60 to ₹83.50," Choudhary said. 

Meanwhile, crude oil price eased after hitting their highest level since mid-November as supply cuts from OPEC tightened the market. Brent crude futures were trading 0.66% lower at $88.41 a barrel.

On the domestic front, the Indian benchmark equity indices ended higher for the third consecutive session on Tuesday amid positive domestic macroeconomic data.

The Sensex ended 152.12 points, or 0.23%, higher at 65,780.26, while the Nifty closed with gains of 46.10 points, or 0.24%, at 19,574.90.

On Monday, the Foreign institutional investors (FIIs) net sold Indian shares worth ₹3,367.67 crore, while Domestic Institutional Investors (DIIs) net purchased shares to the tune of ₹2,563.48 crore, as per provisional data available on the exchanges.

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