Rupee falls 68 paise to close at 1-month low of 82.76 against US dollar

Weak domestic equities and FII outflows may also put downside pressure on Rupee, Choudhary said.However, a weak tone in crude oil prices may prevent a sharp decline in Rupee.

The rupee tanked 68 paise, its steepest single-day loss in more than four months, to close at a month low of 82.76 against the US currency on Monday due to a stronger greenback in the global markets and FII outflows.

Growing expectations of further rate hikes by the US Federal Reserve after strong US job data and firm crude oil prices weighed on the local unit, forex traders said.

At the interbank foreign exchange market, the rupee opened at 82.35 against the greenback, and fell further to settle at the day’s low of 82.76, a closing level not seen since January 4.

In the previous session on Friday, the rupee settled at 82.08 against the US dollar.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.24 per cent higher at 103.16, on robust job data from the US, which raised expectations of a hawkish Federal Reserve.

Global oil benchmark Brent crude futures advanced 0.45 per cent to USD 80.30 per barrel.

The Indian rupee depreciated on a rally in the US Dollar and weak domestic markets, said Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas.

''Dollar gained on robust economic data from the US raising expectations of hawkish Federal Reserve.

''Non-farm payrolls added 517,000 jobs in January topping estimates of 193,000 jobs while ISM services PMI unexpectedly surged to 55.2 in January sharply above estimates of 50.5. Unemployment rate declined to 3.4 per cent in January compared to forecast of 3.6 per cent.

''We expect the rupee to trade with a negative bias as the rebound in Dollar may further weaken the domestic currency. Weak domestic equities and FII outflows may also put downside pressure on Rupee,'' Choudhary said.

However, a weak tone in crude oil prices may prevent a sharp decline in Rupee. Market participants may remain cautious ahead of RBI's monetary policy outcome on Wednesday.

''There are expectations of a 25-bps rate hike to 6.5 per cent USDINR spot price is expected to trade in a range of Rs 82 to Rs 83.30,'' Choudhary said.

''Rupee traded weak as the dollar index prices rose sharply above USD 103 after the lower unemployment data and very high non-farm payroll data supported the greenback with even further hawkish view point expected in the coming speech from Jerome Powell,'' said Jateen Trivedi, VP Research Analyst at LKP Securities.

Trivedi further said that rupee weakness can continue towards 82.90-83.10.

The 30-share BSE Sensex ended 334.98 points or 0.55 per cent lower at 60,506.90, while the broader NSE Nifty declined 89.45 points or 0.5 per cent to 17,764.60.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday as they offloaded shares worth Rs 1,218.14 crore, according to exchange data.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)