Rupee vs Dollar: Domestic currency drops 26 paise to settle at 83.12 against American dollar

Currency market update: At the interbank foreign exchange, the rupee began the day at 82.95 against the dollar and fell to as low as 83.12 during the session and settled against the greenback for the day.

Throughout the session, the domestic currency oscillated within a range of 82.92 - 83.12. Pic: Pixabay

Currency market update: The rupee (INR) settled at 83.12 (provisional) against the US dollar on Tuesday, January 16. As a strong greenback against major rivals overseas and a negative equity market dented investor sentiment, the local currency registered a gain of 26 paise for the day from its previous close. Throughout the session, the domestic currency oscillated within a range of 82.92 - 83.12.

Besides, volatile crude oil prices in the international markets weighed on the domestic currency, said PTI citing forex traders.

At the interbank foreign exchange, the rupee began the day at 82.95 against the dollar and fell to as low as 83.12 during the session and settled against the greenback for the day. The domestic currency touched the peak of 82.92 against the greenback during intra-day deals.

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The rupee depreciated on the strong dollar and weak domestic markets, said PTI citing Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas. "A rise in crude oil prices also put downside pressure on the rupee. However, favourable macroeconomic data prevented a sharp fall in the rupee." Meanwhile, the US dollar gained on safe-haven demands amid concern over disruption in global trade through the Red Sea route.

Choudhary said the rupee is likely to "trade with a slight negative bias on risk aversion in the global markets amid escalating geopolitical tensions in the Middle East. "USD-INR spot price is expected to trade in a range of Rs 82.60 to Rs 83.40."

The dollar index — which measures the value of the American currency against six peers other than the rupee — was last seen trading 0.78 per cent higher at 102.95.

Global oil benchmark Brent crude futures increased 0.67 per cent to USD 78.67 per barrel at the last count.

In contrast to this, domestic equity benchmarks Sensex and Nifty50 declined by 0.27 per cent - 0.29 per cent. The 30-share benchmark BSE Sensex fell 199.17 points for the day to settle at 73,128.77 points while the broader NSE Nifty declined 65.15 points to settle at 22,032.30 points.

On Monday, January 15, the rupee settled with a gain of 9 paise at 82.86 against the American dollar. This was the ninth consecutive day of gain for the Indian currency.

According to exchange data, foreign institutional investors (FIIs) were net buyers in the equity market on Tuesday as they bought shares worth Rs 656.57 crore.

The decline in the rupee was "influenced by the rise in the dollar index" and the increase in crude prices, said PTI citing Jateen Trivedi, VP Research Analyst, LKP Securities.

"Tomorrow's economic data, including China's GDP and industrial production, as well as the US retail sales data in the evening, are anticipated to keep the markets active with reactions to the released information," Trivedi added.

With inputs from PTI

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