Rupee Falls 6 Paise to 85.78 vs US Dollar
The Indian rupee weakened by 6 paise to 85.78 against the US dollar in early trade on Wednesday, weighed down by a negative trend in domestic equities and the recovery of the American currency in the overseas market.
Illustration: Dominic Xavier/Rediff.com
Mumbai, Mar 26 (PTI) The rupee weakened by 6 paise to 85.78 against the US dollar in early trade on Wednesday, weighed down by a negative trend in domestic equities and the recovery of the American currency in the overseas market.
Forex dealers said the rupee faced renewed pressure on liquidity constraints, concerns over reciprocal tariff implementations and month-end demand for the US currency from importers.
However, foreign fund inflows supported the rupee at lower levels.
At the interbank foreign exchange, the rupee opened at 85.71 against the greenback, then lost ground and touched 85.78, down 6 paise from its previous close.
On Tuesday, the rupee snapped its seven-session rally and settled with a loss of 11 paise at 85.72 against the US dollar.
"RBI's USD 77.53 billion in short-side forward positions signals potential dollar-buying intervention, which could cap the rupee's gains. Additionally, geopolitical risks -- from Israel's offensive in Gaza to US air strikes on Iran-backed Houthi rebels -- are driving demand for safe-haven assets like the US dollar," CR Forex Advisors MD Amit Pabari said.
Meanwhile, the US dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.12 per cent higher at 104.30.
Brent crude, the global oil benchmark, was trading 0.22 per cent higher at USD 73.18 per barrel in futures trade.
"Meanwhile, US President Donald Trump has threatened a 25 per cent tariff on countries purchasing oil and gas from Venezuela. This has pushed Brent crude prices over USD 72.50 per barrel, raising concerns over India's trade deficit and adding downward pressure on the rupee," Pabari added.
In the domestic equity market, the 30-share BSE Sensex was trading 59.56 points, or 0.08 per cent, lower at 77,957.63 points, while the Nifty was down 20.60 points, or 0.09 per cent, at 23,648.05 points.
Foreign institutional investors (FIIs) purchased equities worth Rs 5,371.57 crore on a net basis on Tuesday, according to exchange data.
Forex dealers said the rupee faced renewed pressure on liquidity constraints, concerns over reciprocal tariff implementations and month-end demand for the US currency from importers.
However, foreign fund inflows supported the rupee at lower levels.
At the interbank foreign exchange, the rupee opened at 85.71 against the greenback, then lost ground and touched 85.78, down 6 paise from its previous close.
On Tuesday, the rupee snapped its seven-session rally and settled with a loss of 11 paise at 85.72 against the US dollar.
"RBI's USD 77.53 billion in short-side forward positions signals potential dollar-buying intervention, which could cap the rupee's gains. Additionally, geopolitical risks -- from Israel's offensive in Gaza to US air strikes on Iran-backed Houthi rebels -- are driving demand for safe-haven assets like the US dollar," CR Forex Advisors MD Amit Pabari said.
Meanwhile, the US dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.12 per cent higher at 104.30.
Brent crude, the global oil benchmark, was trading 0.22 per cent higher at USD 73.18 per barrel in futures trade.
"Meanwhile, US President Donald Trump has threatened a 25 per cent tariff on countries purchasing oil and gas from Venezuela. This has pushed Brent crude prices over USD 72.50 per barrel, raising concerns over India's trade deficit and adding downward pressure on the rupee," Pabari added.
In the domestic equity market, the 30-share BSE Sensex was trading 59.56 points, or 0.08 per cent, lower at 77,957.63 points, while the Nifty was down 20.60 points, or 0.09 per cent, at 23,648.05 points.
Foreign institutional investors (FIIs) purchased equities worth Rs 5,371.57 crore on a net basis on Tuesday, according to exchange data.
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