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Rupee Falls 8 Paise vs US Dollar: Weak Equities, FII Outflows

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By Rediff Money Desk, MUMBAI   Jan 23, 2024 20:46

The Indian rupee depreciated 8 paise against the US dollar on Tuesday, weighed down by foreign fund outflows and weak domestic equities. However, a weak US dollar against major rivals overseas cushioned the downside.
Rupee Falls 8 Paise vs US Dollar: Weak Equities, FII Outflows
Illustration: Dominic Xavier/Rediff.com
Mumbai, Jan 23 (PTI) The rupee depreciated 8 paise to 83.15 against the US dollar, as foreign fund outflows and weak domestic equities weighed on investor sentiments.

However, a weak US Dollar against major rivals overseas supported the domestic unit and cushioned the downside, forex traders said.

At the interbank foreign exchange market, the local unit opened at 83.11 and finally settled at 83.15 against the dollar, down by 8 paise from its previous close.

During the day, it witnessed an intraday high of 83.06 and a low of 83.17 against the American currency.

On Friday, the rupee settled at 83.07 against the US dollar.

"We expect the rupee to trade with a slight negative bias on weak domestic markets and selling pressure from foreign investors.

"Any further increase in crude oil prices may also weigh on the rupee. However, positive global markets and a weak Dollar may support the rupee at lower levels. Traders may remain cautious ahead of Richmond manufacturing index data from the US," said Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas.

Choudhary further noted that USD/INR spot price is likely to trade in a range of Rs 82.80-83.50.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.10 per cent to 103.22.

"European currencies were slightly down while Asian currencies were muted at morning level. After Hang Seng Closed 1.14 per cent higher, Chinese and European markets were all down while Dow futures were 25 points down after making a new high yesterday.

"Oil again could not move beyond USD 80 as demand outlook from China kept it down. Bank of Japan holds firm on ultra-loose monetary policy amidst global tightening and continues with its yield curve control strategy for 10 year Govt Bonds Yen gained from 148.55 to 147.86 after the announcement of policy measures," said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.

Brent crude futures, the global oil benchmark, were trading lower by 0.60 per cent to USD 79.58 per barrel.

On the domestic equity market front, Sensex declined 1,053.10 points, or 1.47 per cent, to settle at 70,370.55 points. The Nifty slipped 333.00 points, or 1.54 per cent, to 21,238.80 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday as they offloaded shares worth Rs 3,115.39 crore, according to exchange data.

Meanwhile, India's forex reserves jumped USD 1.634 billion to USD 618.937 billion for the week ended January 12, the Reserve Bank of India (RBI) said on Friday.

In the previous reporting week, the overall reserves had declined sharply by USD 5.89 billion to USD 617.3 billion.
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