Rupee snaps 6-day winning run, skids 13 paise to 73.05 against USD

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Mumbai, Jan 28 (PTI) Snapping its six-session rising streak, the rupee depreciated by 13 paise to end at 73.05 against the US dollar on Thursday, tracking muted domestic equities and a strengthening American currency overseas.

Foreign fund outflows and a sell-off in global markets also weighed on the local unit, forex traders said.

At the interbank forex market, the rupee opened at 73.13 against the greenback and hit an intra-day high of 73.04 and a low of 73.15.

It finally finished at 73.05, lower by 13 paise over its last close. On Wednesday, the rupee had ended at 72.92.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, advanced 0.08 per cent to 90.71.

On the domestic equity market front, the BSE Sensex ended 535.57 points or 1.13 per cent lower at 46,874.36, while the broader NSE Nifty declined 149.95 points or 1.07 per cent to 13,817.55.

Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 1,688.22 crore on Wednesday, according to exchange data.

Brent crude futures, the global oil benchmark, fell 0.22 per cent to USD 55.69 per barrel.

'The Indian Rupee depreciated for the first time in seven sessions as investors fled to the safety of the dollar due to souring risk sentiment in global markets,' said Sriram Iyer, Senior Research Analyst at Reliance Securities.

Iyer further noted that the dollar index rose ahead of the US GDP data.

'Weak than expected data will push more investors towards the US Dollar and vice versa,' Iyer said, adding that markets will also look at cues from the jobless claims data.

According to Devarsh Vakil, Deputy Head of Retail Research at HDFC Securities, 'outflows from domestic markets contributed towards rupee depreciation.' 'The FOMC meeting provided very little new information in its first meeting of the year. They held the rate and bond buying program, the focus shift has now shifted to today's Q4 GDP number,' Vakil said.

The US Federal Reserve on Wednesday left the benchmark interest rate unchanged near zero and vowed to maintain its bond buying program of USD 120 billion per month.

Vakil further noted that 'spot USDINR is expected to mirror the move in dollar index and could see further short covering bounce. Upside resistances comes in at 73.50 to 73.70 while on downside 72.75 remains the crucial level.' 'Marginal weakness in rupee was also seen following strength in the dollar against its major crosses. Market participants remain cautious ahead of the important Union Budget and RBI policy statement that will be released next week,' said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services. PTI DRR ABM ABM