Rupee falls 6 paise against US dollar amid rising crude prices

Rupee falls 6 paise against US dollar amid rising crude prices

The rupee paused its two days of gains and settled 6 paise lower at 83.24 (provisional) against the US dollar on Thursday as rising crude oil prices dented the investor sentiment.

Forex analysts said early gains in the domestic currency on the back of the weak dollar were reversed by the subdued domestic equity markets and concerns over foreign funds withdrawal.

The rupee had settled 7 paise higher on Wednesday, a day after gaining 3 paise against the American currency.

Market participants were also awaiting the industrial production data for August and inflation numbers for September to be released later in the day, which will provide insights into the country’s economic health.

Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said the rupee is expected to trade with a slight positive bias on expectations of a decline in India’s inflation and a rise in risk appetite in global markets.

“Traders may remain cautious ahead of India’s CPI and IIP data. Traders may also take cues from US CPI, weekly unemployment claims and Federal Budget balance data. USD-INR spot price is expected to trade in a range of Rs 82.70 to Rs 83.60,” Choudhary added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.09 per cent lower at 105.72.

Brent crude futures, the global oil benchmark, witnessed a sharp rise of 1.20 per cent to USD 86.85 per barrel.

On the domestic equity market front, the BSE Sensex closed 64.66 points or 0.10 per cent lower at 66,408.39. The broader NSE Nifty declined 17.35 points or 0.09 per cent to 19,794.

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Wednesday as they offloaded shares worth Rs 421.77 crore, as per exchange data.