Mumbai, Jan 16 (PTI) The rupee tumbled for the third straight session, losing 44 paise to settle near its lowest level at 90.78 against the US dollar on Friday, on strong dollar demand and persistent foreign fund outflows.
Forex traders said lingering concerns over US-India trade negotiations and geopolitical tensions further dented investor sentiment.
At the interbank foreign exchange, the rupee opened at 90.37 and touched an intraday low of 90.89 against the greenback. It ended the session at 90.78 against the greenback, down 44 paise from Wednesday’s close.
The domestic foreign exchange market was closed on Thursday due to the Mumbai municipal corporation elections.
The rupee marked its third straight session of decline, during which it has fallen 61 paise.
On Wednesday, it fell 11 paise to close at 90.34 against the US dollar, after declining 6 paise on Tuesday.
The Indian currency recorded its lowest closing level of 90.93 on December 16, when it also saw its lifetime low of 91.14 in intraday trade.
“Indian rupee’s underperformance relative to its Asian peers stems from a “perfect storm” of high dollar demand and a retreating tide of foreign capital. Compounding these pressures is the lingering worries in US-India trade negotiations,” Dilip Parmar, Research Analyst, HDFC Securities said.
“Technical weakness was further intensified by fixing-related dollar bids linked to the RBI’s recent FX swap as forex markets were closed on Thursday,” Parmar added.
“We expect the rupee to trade with a negative bias on uncertainty over trade deal talks and geopolitical tensions. A strong dollar, FII outflows from capital markets and elevated crude oil prices may pressurise the rupee,” Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan, said and projected the USD-INR spot price to trade “in a range of 90.50 to 91.25”.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, was trading 0.08 per cent lower at 99.24.
Brent crude, the global oil benchmark, was trading 0.91 per cent higher at USD 64.34 per barrel in futures trade.
On the domestic equity market front, the Sensex climbed 187.64 points to settle at 83,570.35, while the Nifty rose 28.75 points to 25,694.35.
Foreign institutional investors offloaded equities worth Rs 4,346.13 crore on Friday, according to exchange data. PTI HVA DRR
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