Image for representation | Photo Credit: C. Venkatachalapathi
The rupee depreciated by 4 paise to close at 82.55 (provisional) against the US dollar on Friday tracking a firm trend in domestic equities and crude oil prices.
Forex traders said the rupee consolidated in a narrow range amid risk aversion in global markets.
At the interbank forex market, the local unit opened at 82.61 against the American currency and touched a day’s low of 82.64 and a high of 82.34.
It finally settled at 82.55 against the greenback, down 4 paise from its previous close of 82.51.
According to Anuj Chowdhary, research analyst at Sharekhan by BNP Paribas, weak domestic equities and strong dollar impacted the local unit.
“The dollar strengthened as the pound weakened amid expectations of an interest rate hike by the Fed and disappointing UK GDP data,” he added.
“We expect the rupee to trade with a slight downside bias amid risk aversion in global markets and sharp fall in crude oil prices. Strong dollar on Fed’s dovish tone may also put pressure on the rupee,” Chowdhury said. “
Chowdhary said market participants may remain cautious ahead of IIP data from India and US USD-INR spot price on Michigan consumer sentiment is expected to trade in the range of Rs 82 to Rs 83.30.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.06% to 103.28.
Global oil benchmark Brent crude futures rose 2.22% to $86.38 a barrel.
On the domestic equity market front, the 30-share BSE Sensex declined 123.52 points, or 0.20%, to close at 60,682.70, while the broader NSE Nifty declined 36.95 points, or 0.21%, to 17,856.50.
Foreign institutional investors (FIIs) were net sellers in the capital market on Thursday as they sold shares worth ₹144.73 crore, according to exchange data.