Rupee slips 1 paisa to close at record low of 83.10 against dollar

Forex traders said the rupee is likely to trade with a negative bias on risk aversion in global markets and a rising US dollar.

Mumbai, Aug 18 (PTI) The rupee edged lower by 1 paisa to settle at an all-time low of 83.10 against the US dollar on Friday, weighed down by a negative trend in domestic equities and foreign fund outflows.

Forex traders said the rupee is likely to trade with a negative bias on risk aversion in global markets and a rising US dollar.

At the interbank foreign exchange, the domestic unit opened at 83.03 against the dollar and moved in a range of 83.02 to 83.13 in the day trade. It finally ended the day at 83.10, registering a fall of 1 paisa from its previous close.

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On Thursday, the rupee settled lower by 1 paisa at a record low of 83.09 against the US dollar.

The rupee declined marginally on weak domestic markets and foreign fund outflows, said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

However, the softness of the US dollar cushioned the downside. The US dollar eased as the Chinese central bank intervened after the Yuan fell to a 16-year low.

The US dollar gained on Thursday as US weekly unemployment claims declined to 239,000 as compared to 250,000 in the previous week showing a tight labour market.

Dilip Parmar, Research Analyst at HDFC Securities, stated that the rupee recovered slightly from its record closing low on Thursday supported by lower US treasury yields and the greenback against Asian currencies.

However, the local unit remained the median performer among Asian currencies as RBI has been likely intervening in the market along with corporate dollar inflows.

The local unit has marked a fourth week of losses in five amid broad dollar strength and risk-averse sentiments.

In the near term, RBI may try to protect the level of 83.30 but the direction remains upwards for USDINR as long as it holds 82.70, Parmar said.

“Rupee in the last couple of sessions has been consolidating in a narrow range, following suspected RBI intervention and dollar inflows that curtailed sharp depreciation of the currency,” Gaurang Somaiya of Motilal Oswal Financial Services said.

Rising uncertainty over economic recovery in China is leading to weakness in the Chinese Yuan and thereby weighing on the rupee, he added. “Next week, we expect the USDINR(Spot) to trade sideways and quote in the range of 82.80 and 83.30.”

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.11 per cent to 103.46.

Brent crude futures, the global oil benchmark, declined 0.32 per cent to USD 83.85 per barrel.

On the domestic equity market front, the 30-share BSE Sensex closed 202.36 points or 0.31 per cent lower at 64,948.66 points. The broader NSE Nifty declined 55.10 points or 0.28 per cent to close at 19,310.15 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Friday as they offloaded shares worth Rs 266.98 crore, according to exchange data.

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