The rupee fell 12 paise to close at 74.52 against the US dollar on Thursday amid month-end dollar demand and foreign cash outflows into the equity and debt markets. In the interbank foreign exchange market, the local currency opened at 74.55 and had a high of 74.47 and a low of 74.58 against the US dollar.
Local unity eventually settled at 74.52, down 12 paise from its previous close. The rupee closed at 74.40 on Wednesday. “The rupee depreciated after two days of consolidation amid month-end dollar demand and foreign outflows from stock and bond markets,” said Dilip Parmar, research analyst, HDFC Securities.
Mediocre price actions were seen in the global forex market following the US holiday, as the rupee traded lower as month-end dollar demand and dollar outflows from equity. and debt weighed in, Parmar said. The resumption of risk sentiments and the series of IPOs expected in the coming months will limit the decline if the dollar index and crude oil prices strengthen. “Spot USD-INR is expected to trade in a range of 74-74.70,” Parmar noted.
“With the US markets closing for the Thanksgiving holiday, volatility has been low. In the short term, the USDINR is expected to trade in a range of 74.30 to 74.75,” said Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak. Securities.
Sriram Iyer, senior research analyst at Reliance Securities, said the rupee depreciated after FOMC minutes showed Fed officials agreed to start cutting its $ 120 billion pandemic relief from monthly purchases with a schedule that would see them completely decrease by next June.
Asian currencies were mixed, while the dollar and benchmark bond yield eased in the European session on Thursday and provided support. Additionally, falling crude oil prices have limited the depreciation bias, Iyer noted. Futures on Brent crude, the world’s benchmark for oil, fell 0.36% to $ 81.95 a barrel.
On the national stock market front, the BSE Sensex finished up 454.10 points or 0.78% to 58,795.09, while the broader NSE Nifty index rose 121.20 points or 0 , 7% at 17,536.25.
The dollar index, which measures the strength of the greenback against a basket of six currencies, was trading down 0.20% at 96.68. Foreign institutional investors were net sellers in the capital market on Wednesday as they shied away from shares worth Rs 5,122.65 crore, exchange data showed.