Rupee Falls to 88.79 Against US Dollar

Mumbai, Oct 9 (PTI) The rupee traded with a slight negative bias and hovered near its all-time low levels before settling for the day at 88.79 against the US dollar, lower by 4 paise on Thursday, as strong greenback demand and ongoing trade tensions between India and the US weighed on investor sentiments.

Forex traders said the USD/INR pair is trading in a tight range as absence of economic data from US amid the government shutdown may also lead to consolidation.

At the interbank foreign exchange, the rupee opened at 88.76 against the greenback and fell to an intraday low of 88.79 and a high of 88.74. It finally closed the day at 88.79 (provisional) against the greenback, registering a decline of 4 paise over its previous close.

On September 30, the rupee had fallen to an all-time low of 88.80 against the US dollar.

"Strong US dollar and importer demand weighed on the rupee. However, strength in the domestic markets and overnight decline in crude oil prices cushioned the downside. Reports of RBI intervention too supported the local unit," Anuj Choudhary, Research Analyst, Currency and commodities, Mirae Asset ShareKhan.

Choudhary further noted that the rupee is likely to trade with a slight positive bias on positive domestic markets and rising odds of a rate cut by the US Federal Reserve amid the US government shutdown.

"However, a firm greenback and ongoing trade tensions between India and the US may cap sharp upside. Absence of economic data from US amid the government shutdown may also lead to slight consolidation as rupee hovers near all-time lows," Choudhary said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.01 per cent higher at 98.92.

Brent crude, the global oil benchmark, was trading lower by 0.20 per cent at USD 66.12 per barrel in futures trading.

On the domestic equity market front, the Sensex jumped 398.44 points to settle at 82,172.10, while the Nifty climbed 135.65 points to 25,181.80.

Meanwhile, Foreign Institutional Investors on Wednesday bought equities worth Rs 81.21 crore, according to exchange data.