The risk aversion sentiment among investors weighed on the local unit.
The risk aversion sentiment among investors weighed on the local unit.
The rupee on Thursday closed 5 paise lower at 82.38 against the US dollar, tracking a sluggish trend in domestic equities amid weak domestic macroeconomic data.
Besides, the risk aversion sentiment among investors weighed on the local unit.
In interbank forex, range bound trading was observed in the rupee. It opened at ₹82.30 against the US Dollar, then fell further to close at ₹82.38, registering a decline of 5 paise over the previous close. It was moving in a tight range of ₹82.25 to ₹82.42.
On Wednesday, the rupee fell by 12 paise to close at ₹82.33 against the greenback.
“Asian currencies fell amid caution as traders await Thursday’s US inflation data to see how much the US Federal Reserve will raise rates,” said Dilip Parmar, Research Analyst, HDFC Securities.
Mr Parmar further said that the Indian rupee was impacted by disappointing domestic economic data, coupled with weaker regional currencies. In the forward market, the one-year forward USD/INR premium declined as the central bank was on the receiving end.
“Spot USD/INR is trading in a narrow range this week amid central bank intervention from both sides. In the short term, Spot USD/INR is showing resistance at 82.85 and support at 82.10,” Mr. Parmar said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.26% to 113.02.
Global oil benchmark Brent crude futures rose 0.32% to $92.85 a barrel.
In the domestic equity market, the 30-share BSE Sensex was down 390.58 points or 0.68% at 57,235.33 and the broader NSE Nifty fell 109.25 points or 0.64% at 17,014.35.
Foreign institutional investors (FIIs) were net sellers in the capital market as they sold shares worth ₹542.36 crore on Wednesday, according to exchange data.
On the domestic macroeconomic front, higher food prices pushed retail inflation to a five-month high of 7.4 per cent, while India’s industrial output fell 0.8 per cent in August to an 18-month low, driven mainly by production. was due to decline. manufacturing and mining sector.
The rise in consumer price index (CPI)-based inflation for the second consecutive month will put pressure on the Reserve Bank of India (RBI) to raise interest rates again to contain higher prices.