The rupee fell 38 paise to settle at 82.60 (provisional) against the U.S. dollar on Wednesday on weak domestic equities and elevated crude prices in international markets.
Rupee is trading in a negative note on risk aversion in global markets and weak Asian currencies. There is also downside pressure on the local unit due to foreign fund outflows.
At the interbank foreign exchange, the domestic unit opened at 82.38 against the dollar and finally ended the day at 82.60 (provisional), registering a fall of 38 paise from its previous close.
During the session, the local unit touched a peak of 82.37 and hit the lowest level of 82.62.
On Tuesday, the rupee had settled at 82.22 against the dollar.
“We expect the rupee to trade with a negative bias on risk aversion in global markets and weak Asian currencies.
“Though the U.S. dollar declined on a credit rating downgrade by Fitch, safe-haven demand amid risk aversion in global markets is providing a shield to the greenback,” Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas, said.
According to him, investors may also remain cautious ahead of the Bank of England’s monetary policy. “We expect the USD-INR spot to trade in the range of 82.20 to 83 in the near-term,” he added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.07% to 102.22.
Brent crude futures, the global oil benchmark, advanced by 0.59% to $85.41 per barrel.
On the domestic equity market front, the 30-share BSE Sensex closed 676.53 points or 1.02% lower at 65,782.78 points. The broader NSE Nifty fell 207.00 points or 1.05% to close at 19,526.55 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital market on Tuesday as they offloaded shares worth ₹92.85 crore, according to exchange data.