Mumbai: The rupee depreciated 32 paise to close at more than two-month low of 74.42 against the US dollar on Monday tracking strong American currency amid global risk aversion.
The local unit opened at 74.40 at the interbank forex market and lost further ground to touch a low of 74.45 in day trade.
Continuing its falling streak for the third straight session, the rupee closed down by 32 paise at 74.42 against the greenback. The rupee had closed at 74.10 on Thursday. Forex market was closed on Friday on account of Id-E-Milad.
Uncertainty ahead of US presidential election weighed on investor sentiment, traders said.
“In the next few sessions market participants will be keeping an eye on the US election results and that could trigger volatility for major crosses including the rupee. We expect the rupee to quote with a negative bias and quote in the range of 74.25 and 74.80,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.23 per cent to 94.25.
On the domestic equity market front, the 30-share BSE Sensex settled 143.51 points or 0.36 per cent higher at 39,757.58. The broader NSE Nifty advanced 26.75 points or 0.23 per cent to 11,669.15.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 870.88 crore on a net basis on Friday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 3.08 per cent to USD 36.77 per barrel.
“The Rupee opened dramatically weaker on Monday tracking losses in the Euro and rising fears about low and slow economic recovery as the UK announced month-long lockdown restrictions over the weekend to prevent the rapid spread of the deadly virus,” said Ankit Agarwal Managing Director, Alankit Limited.
Agarwal further noted that foreign banks may purchase the greenback, likely on behalf of foreign portfolio investors who may pull out funds from Indian equities amid weak sentiment across the globe.