Currency Market News: Rupee slips 1 paisa to 85.59 vs dollar

Rupee consolidated in a narrow range and settled down by 1 paisa at 85.59 (provisional) against the US dollar on Wednesday. The modest decline was driven by dollar demand from importers and foreign banks, coupled with a surge in crude oil prices.

Forex traders noted that market sentiment soured due to rising US Treasury yields and continued foreign fund outflows. However, positive domestic market performance and a weak US dollar index provided some cushion to the rupee’s downside.

At the interbank foreign exchange, the domestic unit opened at 85.65 and fluctuated between an intra-day high of 85.53 and a low of 85.70 against the greenback before closing at 85.59 (provisional), down 1 paisa from the previous close. On Tuesday, the rupee had depreciated 16 paise to close at 85.58 against the US dollar.

Also Read:Currency Market News: Rupee slides 9 paise to 85.67 against vs US dollar 

Market expert view

“We expect the rupee to trade with a negative bias on importer demand for dollar and geopolitical tensions in the Middle East. Elevated crude oil prices may also weigh on the rupee,” said Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan.

However, Choudhary added that a rise in risk appetite in global markets amid easing trade war fears may support the rupee. He expects the USD-INR spot price to trade in a range of 85.40 to 86.

The dollar index, which measures the greenback’s strength against a basket of six currencies, was trading lower by 0.46 per cent at 99.66. Brent crude, the global oil benchmark, rose 1.04 per cent to $66.06 per barrel in futures trade.

Also Read:Final Trade: Sensex up 410 pts, Nifty closes at 24,813; Realty, pharma stocks shine, but volatility keeps bulls in check

Stock markets close higher 

Benchmark indices ended higher, with the Sensex gaining 410 points (0.5 per cent) to close at 81,596, while the Nifty rose 129.55 points (0.5 per cent) to 24,813.45. Among sectoral performers, Nifty Realty led the gains, up 1.7 per cent, followed by Nifty Pharma and Nifty PSU Bank, which gained 1.3 per cent and 0.7 per cent respectively. Nifty IT and Nifty Metal also advanced by 0.7 per cent and 0.4 per cent. The only sectoral loser was Nifty Consumer Durables, down 0.5 per cent.

Foreign institutional investors (FIIs) offloaded equities worth Rs 10,016.10 crore on a net basis on Tuesday, according to exchange data.

(With inputs from PTI)