Rupee falls 11 paise to close at 82.60 against US dollar

The rupee depreciated by 11 paise to close at 82.60 against the US currency on Thursday as a stronger dollar in the overseas market and a muted trend in domestic equities weighed on investor sentiments.

However, massive buying in domestic equities by foreign investors restricted the fall of the local unit, forex traders said.

At the interbank foreign exchange market, the rupee opened at 82.57 against the greenback and closed at 82.60, registering a fall of 11 paise over its previous close of 82.49.

During the session, the domestic unit witnessed an intra-day high of 82.54 and a low of 82.61 against the American dollar.

According to Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services, data showed prices for raw materials increasing last month, suggesting inflation could remain elevated after monthly consumer and producer prices surged in January.

Focus will be on the weekly employment claims number from the US and the preliminary CPI number from the Euro zone, Somaiya said.

''We expect the USDINR(Spot) to trade sideways and quote in the range of 82.40 and 83.05,'' Somaiya added.

Jateen Trivedi, VP Research Analyst at LKP Securities, said rupee traded weak below 82.57 on the back of higher crude prices and strength of the dollar.

''Further rise in the US yields and tepid risk appetite and weak capital market trend kept rupee weakness continued as prices kept taking resistance at 82.55. Rupee range can be seen between 82.45-82.80,'' Trivedi said.

The Indian rupee in line with Asian currencies depreciated after gaining in the last two days amid higher crude oil prices, foreign fund outflows and a surge in bond yields, said Dilip Parmar, Research Analyst, HDFC Securities.

The hawkish comment from the US Federal Reserve and US economic data indicates higher interest rates for a longer time supporting the dollar bulls, he added.

''Back to home, spot USDINR has been consolidating between 82.50 to 83 since February 6. We expect the current consolidation in USDINR may continue for a few more days but the direction of the dollar against major currencies is pointing towards an upward move,'' Parmar said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.52 per cent higher at 105.03.

Global oil benchmark Brent crude futures advanced 0.23 per cent to USD 84.50 per barrel.

The 30-share BSE Sensex ended 501.73 points or 0.84 per cent lower at 58,909.35, while the broader NSE Nifty declined 129.00 points or 0.74 per cent to 17,321.90.

Foreign Institutional Investors (FIIs) turned net buyers in the capital markets on Thursday as they purchased shares worth Rs 12,770.81 crore, according to exchange data.