Rupee Hits Record Low of 84.37 Against US Dollar

Mumbai, Nov 7 (PTI) The rupee declined 6 paise to close at a fresh lifetime low of 84.37 (provisional) against the US dollar on Thursday, as weak domestic equities and sustained foreign fund outflows dented market sentiment.

Forex traders said investors were also cautious ahead of the US Fed meeting outcome. Moreover, overnight gains in crude oil prices also weighed on the local unit.

However, a correction in the dollar index against major currencies helped the rupee and restrained the slide, they added.

At the interbank foreign exchange, the rupee opened at 84.26 against the US dollar. During the session, the local currency touched a high of 84.26 and a low of 84.38. It finally settled at 84.37 (provisional), a loss of 6 paise against its previous close.

On Wednesday, the rupee depreciated 22 paise to close at an all-time low of 84.31 against the US dollar.

The rupee touched fresh record lows again on the back of weak domestic equities and sustained FII outflows. Overnight gains in crude oil prices also weighed on the rupee. However, the softening of the US Dollar index from Wednesday's highs cushioned the downside, forex traders said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.22 per cent lower at 104.86.

Brent crude, the global oil benchmark, fell 0.32 per cent to USD 74.68 per barrel in futures trade.

"We expect the rupee to trade with a negative bias on overall strength in the US Dollar on the back of Donald Trump's victory in the US Presidential elections and FII outflows. However, softening of commodity prices amid easing geopolitical risk premium may support the rupee at lower levels," said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

Any intervention by the RBI may also support the rupee at lower levels. Traders may take cues from weekly unemployment claims data from the US and FOMC meeting decisions. The Bank of England's monetary policy decision is also due.

BoE and FOMC are expected to cut interest rates by 25 bps. USD/INR spot price is expected to trade in a range of 84.15 to 84.60, Choudhary said.

In the domestic equity market, the 30-share BSE Sensex fell 836.34 points, or 1.04 per cent, to close at 79,541.79 points, while Nifty declined 284.70 points, or 1.16 per cent, to settle at 24,199.35 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Wednesday, as they offloaded shares worth Rs 4,445.59 crore, according to exchange data.