Business News/ Markets / Stock Markets/  Rupee ends 7 paise lower 82.16 per US dollar; registers worst week since mid-March

The Indian rupee ended 7 paise lower against the US dollar on Friday, registering its worst week in eight, dragged down by a broader strength in the dollar index.

The local currency closed at a three-week low of 82.16 per US dollar compared with 82.09 in the previous session.

Other Asian currencies also exhibited weakness through the session, with global stocks seeing weak risk sentiment due to tepid Chinese economic data, haggling over US government finances and uncertainty over interest rates.

The US dollar edged higher on Friday and was heading for its biggest weekly gain since February, while the dollar index gained nearly 0.8% so far this week.

The US dollar benefited from safe-haven flows amid growth concerns and banking worries.

Meanwhile, investors will look for India's domestic inflation data due later in the day for cues on the central bank's rate strategy. 

The rupee opened Friday's session flat at 82.10 against the US dollar amid losses in other Asian currencies. It closed on Thursday at 82.09.

Indian benchmark equity indices Sensex and Nifty ended marginally higher on May 12 led by gains in auto and banking heavyweights.

Sensex gained 123.38 points, or 0.20% to close at 62,027.90, while Nifty rose 17.80 points or 0.1% to end at 18,314.80.

On Thursday, the local currency fell 15 paise to close at 82.09 against the US dollar amid broader strength in dollar index, weakness in equity markets and rising crude oil prices.

The US dollar was clinging close to a more than one week peak on Friday as a slew of data overnight pointed to a slowing US economy, with investors betting that the Federal Reserve will further pause its interest rate increases.

Also Read: Achhe din for rupee? Domestic currency may fall below 80 against dollar in coming months, say analysts

The dollar index, which measures the US currency against six rivals, eased 0.059% to 102.02, not far from the 102.15 it touched overnight, the highest since May 2. The index is set to snap a two-week losing streak, gaining 0.7% this week.

Asian currencies were down between 0.3% and 0.6%, weighed by the dollar recovery against major peers. The offshore Chinese yuan dropped to 6.96 to the dollar.

Anand James, Chief Market Strategist at Geojit Financial Services expects a consolidation band for USD/INR of 81.97-82.10. 

“With 81.85 holding, an upswing evolved on anticipated lines. But as maintained yesterday this is less likely to be directional, until 82.2 is broken," he said.

Investors await domestic retail inflation data for April scheduled later today. The consumer inflation likely cooled to an 18-month low of 4.80% in April, according to a Reuters poll of economists.

Foreign Institutional Investors (FIIs) net bought Indian shares worth 837.21 crore, while Domestic Institutional Investors (DIIs) net sold Indian equities worth 200.09 crore on May 11.

Crude oil prices regained some ground in early Asian trade on Friday amid short-covering ahead of the weekend. However, uncertainties regarding the US debt ceiling and renewed fears over a US regional banking crisis capped gains.

Brent crude futures rose by 36 cents, or 0.5%, to $75.34 a barrel. US crude futures gained 41 cents, or 0.6%, to $71.28. They recovered from losses of about 3%-4% over the past two sessions. 

(With inputs from Reuters)

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Updated: 12 May 2023, 04:12 PM IST
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