Rupee ends 9 paise lower at 84.49 amid weak equities and strong dollar
On the equity front, the 30-share BSE Sensex plunged 1,190.34 points or 1.48 per cent to 79,043.74, and the NSE Nifty dropped 360.75 points or 1.49 per cent to close at 23,914.15.
The Indian rupee depreciated by 9 paise on Thursday, closing at 84.49 against the US dollar, as a negative trend in domestic equities and the dollar's strength in global markets weighed on sentiment. The local currency opened at 84.45 at the interbank foreign exchange market and moved in a narrow range, hitting an intraday low of 84.50 before settling at 84.49.
This marks the rupee's continued weakness, following an 11-paise drop on Wednesday when it closed at 84.40. The rupee remains near its record low of 84.50, touched on November 21.
Forex traders pointed to a mixed trend in crude oil prices, which helped limit the downside for the rupee. Brent crude, the global oil benchmark, rose slightly by 0.08 per cent to USD 72.89 per barrel. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six major currencies, advanced 0.25 per cent to 106.34, reflecting robust demand for the US currency.
The latest Federal Open Market Committee (FOMC) minutes revealed signs of a shift in the Federal Reserve's outlook, suggesting potential downward pressure on short-term interest rates. This could reduce the appeal of dollar-denominated assets over time, although for now, the dollar remains strong.
Domestically, the equity markets struggled, with the BSE Sensex tumbling 1,190.34 points or 1.48 per cent to close at 79,043.74. The NSE Nifty also fell sharply, losing 360.75 points or 1.49 per cent to end the day at 23,914.15. The steep losses in equities further weighed on the rupee.
Foreign Institutional Investors (FIIs) provided some respite, as they were net buyers on Wednesday, injecting Rs 7.78 crore into Indian capital markets. Analysts expect the rupee to remain under pressure in the near term due to dollar demand from importers and global uncertainties.
The USD-INR spot rate is expected to trade in a range of Rs 84.35 to Rs 84.70, with overall support coming from softer crude prices and foreign inflows, according to market participants. However, sentiment remains cautious as markets await fresh triggers.
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