Rupee falls 28 paise to 82.65 against US dollar

The rupee declined by 28 paise to 82.65 against the US dollar on Wednesday amid a strong greenback against major currencies overseas and unabated foreign fund outflows.

Traders said negative sentiment in the domestic equity market also hit the domestic currency.

At the interbank foreign exchange, the domestic unit opened strong at 82.32 against the dollar and traded in a range of 82.30 and 82.65. It finally settled at 82.65 against the American currency, a fall of 28 paise against its previous close.

This is the third consecutive day of decline in the rupee. On Tuesday, the rupee settled at 82.37 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.43 per cent to 104.04.

Global oil benchmark Brent crude futures rose 0.46 per cent to USD 77.81 per barrel.

On the domestic equity market front, the 30-share BSE Sensex fell 344.29 points or 0.59 per cent to 57,555.90 points while the broader NSE Nifty declined 71.15 points or 0.42 per cent to 16,972.15 points.

Foreign Institutional Investors (FIIs) remained net sellers in the capital markets on Wednesday as they offloaded shares worth Rs 1,271.25 crore, according to exchange data.

''The US dollar recovered as inflation data from the US raised expectations that Fed may continue its rate hike spree, albeit at a slower pace. Core CPI was slightly above forecast, which continues to remain a cause of concern,'' said Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas. Selling pressure from foreign investors also weighed on the currency, he added.

Unlike domestic market benchmark indices, global markets were mostly upbeat on expectations of a slower interest rate hike by the US Federal Reserve on the back of lower inflation.

In February, the US consumer price index came in largely in line with expectations at 6 per cent. Choudhary also said that a continuous fall in India's exports on the domestic front may impact the overall sentiment.

''Traders may take cues from trade balance data from India and Empire State Manufacturing Index, PPI and retail sales data from the US. Investors may remain vigilant amid contagion concerns from the US banking crisis. USD/INR spot price is expected to trade in a range of Rs 82 to Rs 83,'' he added.

India's exports dipped in February for the third consecutive month by 8.8 per cent to USD 33.88 billion against USD 37.15 billion in the same month last year, according to the data released by the commerce ministry on Wednesday.

Imports also declined by 8.21 per cent to USD 51.31 billion as against USD 55.9 billion recorded in the corresponding month last year.