Rupee falls 11 paise to close at 82.75 against US dollar

Mumbai: The rupee depreciated 11 paise to close at 82.75 against the US currency on Friday, as the strength of the American currency in the overseas market and a muted trend in domestic equities weighed on investor sentiments.

Unabated foreign fund outflow also impacted the market sentiments.

At the interbank foreign exchange market, the rupee opened at 82.67 against the greenback and finally settled for the day at 82.75, registering a fall of 11 paise over its previous close of 82.64.

During the session, the domestic unit witnessed an intra-day high of 82.66 and a low of 82.81 against the American dollar.

According to Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services, rupee continued to trade in a narrow range and volatility remained low.

“Nearly all Fed policymakers supported the decision to further slow the pace of interest rate hikes,” Somaiya said, adding that focus will be on the core PCE index number and a higher number could extend gains for the dollar.

“We expect the USDINR(Spot) to trade sideways and quote in the range of 82.40 and 83.05,” Somaiya said.

According to Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, the Indian rupee depreciated on weak domestic markets and a positive greenback. Rebound in crude oil prices also weighed on rupee.

Dollar strengthened on upbeat labour market data and expectations of a hawkish Federal Reserve. However weak GDP capped sharp upside in dollar. The US economy expanded at 2.7 per cent in Q4 2022 compared to initial estimates of 2.9 per cent and 3.2 per cent in Q3 2022, Choudhary said.

“We expect rupee to trade with a negative bias on expectations that dollar may strengthen further on hawkish Fed and weak domestic markets. FII outflows and renewed geopolitical tensions may also put downside pressure on rupee,” Choudhary added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.60 per cent higher at 105.23.

Global oil benchmark Brent crude futures were trading 0.66 per cent lower at USD 81.67 per barrel.

The 30-share BSE Sensex ended 141.87 points or 0.24 per cent lower at 59,463.93, while the broader NSE Nifty declined 45.45 points or 0.26 per cent to 17,465.80.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday as they offloaded shares worth Rs 1,470.34 crore, according to exchange data.