Mumbai, Jul 23 (PTI) The rupee stayed weak for the sixth consecutive session and settled with a loss of 3 paise at 86.41 against the dollar on Wednesday, amid a strong American currency and outflow of foreign funds.
Forex traders said the domestic unit, however, found some cushion due to lower crude oil prices and heavy buying in domestic equity markets in line with global trends after the US announced a trade deal with Japan.
At the interbank foreign exchange, the Indian currency opened weak at 86.46 and touched the intra-day peak of 86.34 against the greenback. The unit ended the session at 86.41, registering a loss of 3 paise from its previous closing level.
At the end of Tuesday’s trading session, the local unit settled at 86.38, down 7 paise over its previous close. This was rupee’s fifth straight session of decline since July 16, when the unit had lost 16 paise and settled at 85.92 against the dollar.
Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee weakened on a strong greenback and foreign institutional investors’ outflows. However, overnight decline in crude oil prices and positive domestic equities cushioned the downside.
“Traders may take cues from PPI (producer price index) and industrial production data from the US. USD-INR spot price is expected to trade in a range of Rs 85.60 to Rs 86.30,” he added.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.04 per cent to 97.16.
According to Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, rupee traded in a narrow range and dollar index remained steady as markets awaited further cues.
“Domestic capital markets gained 0.65 per cent, while Federal Reserve Chair Jerome Powell’s recent speech kept the dollar range-bound. Attention now shifts to next week’s US interest rate decision, which will be a key directional trigger. Rupee is expected to trade within a range of 85.80-86.70,” Trivedi said.
Brent crude, the global oil benchmark, declined 0.52 per cent to USD 68.23 per barrel in futures trade.
According to experts, investors are awaiting the outcome of India-US trade talks ahead of the August 1 deadline as Indian exporters are staring at higher tariffs in the American market.
If the discussions fail or get delayed, Indian exporters could face fresh pressure — adding to the rupee’s challenges.
The US team will visit India in August for the next round of negotiations for the proposed bilateral trade agreement between the two countries.
India and the US teams concluded the fifth round of talks for the agreement last week in Washington.
Meanwhile, in the domestic equity market, Sensex climbed 539.83 points, or 0.66 per cent, to 82,726.64, while Nifty rose 159.00 points, or 0.63 per cent, to 25,219.90.
Foreign institutional investors (FIIs) offloaded equities worth Rs 4,209.11 crore on a net basis on Wednesday, according to exchange data. PTI HVA SHW
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