Rupee declines by 7 paise to 75.03 on month-end dollar demand
The rupee weakened by 7 paise to end at 75.03 against the US currency on Wednesday due to month-end dollar demand from importers and a muted trend in the domestic equities.
A stronger dollar in overseas markets and suspected RBI intervention ahead of IPOs also weighed on the local unit, according to analysts.
''The Indian rupee depreciated following month-end dollar demand and a stronger greenback against major currencies. Weakness in Asian currencies and risk-off sentiments weighed on the local unit,'' said Dilip Parmar, Research Analyst, HDFC Securities.
''Going Ahead, the rupee is expected to consolidate between 74.70 and 75.30 following expectation of fund inflows from a series of IPOs starting from tomorrow,'' Parmar added.
At the interbank foreign exchange market, the local currency opened at 75.02 and later witnessed a high of 74.90 and a low of 75.05 against the US dollar in the day trade.
The rupee finally settled at 75.03 a dollar, down 7 paise over its previous close of 74.96 against the US dollar.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.02 percent up at 93.97.
''Another lackluster day in USDINR with primary market FPI flows being offset by suspected RBI intervention and demand for US Dollars from oil marketing companies,'' said Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd.
Banerjee further said that ''over the near term, IPO-related FPI flows will remain heavy and that along with carrying trade may keep USDINR capped near 75.20/25 levels. But strong US Dollar Index and RBI intervention may prevent a sharp slide. Therefore, a range of 74.75 to 75.25 may unfold over the near term.'' ''The forex traders are having a wary eye on ECB policy, a moderately dovish tone will activate the dollar bulls. But its implication on USDINR spot will be limited as we have IPO subscriptions this week,'' according to Emkay Global Financial Services.
In USDINR spot, ''we expect immediate resistance lies around 75.30, a break of which can push prices towards the 75.50 zones. While 74.75-74.50 will act as crucial support,'' it noted. Oil prices eased in global markets with the benchmark Brent Crude declining by 1.08 percent to USD 85.47 per barrel.
On the domestic equity market front, the BSE Sensex ended 206.93 points or 0.34 percent lower at 61,143.33 while the broader NSE Nifty declined 57.45 points or 0.31 percent to 18,210.95.
Foreign institutional investors were net sellers in the capital market on Tuesday as they offloaded shares worth Rs 2,368.66 crore, according to the exchange data.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)