Rupee declines by 9 paise to end at 72.89 on strong dollar

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Mumbai, Jun 8 (PTI) The rupee depreciated by 9 paise to close at 72.89 against the US currency on Tuesday, tracking a strong dollar overseas and subdued sentiment in the domestic equities.

However, a fall in crude oil prices restricted the rupee’s decline, forex traders said.

'Rupee consolidated in a narrow range for the second successive session following low volatility in domestic equities as well. This week, more global factors are likely to impact the currency as no major economic data is expected to be released on the domestic front,' Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services, said.

'The greenback is likely to be impacted by the inflation number that will be released from the US. Today, volatility for the dollar could remain low following lack of cues from the US. For the next couple of sessions we expect the USDINR (Spot) to trade sideways and quote in the range of 72.70 and 73.20,' Somaiyaa said.

At the interbank forex market, the local unit opened slightly up at 72.78 against the greenback and witnessed an intra-day high of 72.76 and a low of 72.90. It finally ended at 72.89 against the American currency, a decline of 9 paise over its previous close. On Monday, the rupee had settled at 72.80 against the US dollar.

On the domestic equity market front, the BSE Sensex ended 52.94 points or 0.10 per cent lower at 52,275.57, while the broader NSE Nifty slipped 11.55 points or 0.07 per cent to 15,740.10.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, surged 0.20 per cent to 90.12. Brent crude futures, the global oil benchmark, fell 0.66 per cent to USD 71.02 per barrel.

Foreign institutional investors were net sellers in the capital market on Monday as they sold shares worth Rs 186.46 crore, as per exchange data.

India reported less than one lakh new coronavirus infections after a gap of 63 days, while the daily positivity rate dropped to 4.62 per cent, according to the Union Health Ministry data updated on Tuesday. 'The Indian rupee depreciated marginally on Tuesday against the US Dollar amid importer covering and a rebound in the dollar index...Asian currencies were mostly weaker against the greenback and weighed on sentiments. Reopening of economies and dovish Fed continue to keep dollar upside limited and lent support,' Sriram Iyer, Senior Research Analyst at Reliance Securities, said.

The US dollar was trading marginally in the green, while the Euro fell on Tuesday afternoon trade as investors prepared for US inflation data due later in the week along with the European Central Bank meeting, he added.

'Rupee traded flat as the capital market along with dollar index were muted in trade. Also, the Crude price sitting on the sideline around USD 70 traded in a small range for the past couple of days. The range ahead in USD/INR will be seen between 72.75-73.25,' Jateen Trivedi, Senior Research Analyst at LKP Securities, said. PTI BAL MR MR

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