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Mumbai, Aug 4 (PTI) The rupee fell by 7 paise to settle at a more than two-month low against the US dollar on Friday weighed down by safe-haven dollar demand and higher crude oil prices.
Foreign fund outflows also weighed on the local unit, analysts said.
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At the interbank foreign exchange, the domestic unit opened at 82.73 against the dollar and finally ended the day at 82.81, registering a fall of 7 paise from its previous close.
During the session, the local unit touched a peak of 82.72 and hit the lowest level of 82.85.
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On Thursday, the rupee had settled at 82.74 against the dollar.
The Indian rupee settled lower following safe-haven dollar demand and higher crude oil prices, Dilip Parmar, Research Analyst, HDFC Securities said.
In the week gone, foreign institutions were net sellers of USD 273 million in domestic equities while the rupee fell nearly 0.7 per cent.
The rupee dropped by 64 paise this week.
All eyes will be on the next week’s RBI monetary policy after the recent surge in food prices. Traders are pricing in no change at the August 10 meeting.
“From the technical front, the trend for spot USDINR remains bullish with higher side resistance at 83.30 and support at 82.60,” Parmar added.
According to Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas, Indian rupee depreciated on Friday on a surge in crude oil prices and selling pressure from foreign investors.
However, positive domestic markets and a soft US Dollar cushioned the downside. US Dollar declined on Thursday from a four-month high on weaker-than-expected ISM services PMI and weekly unemployment claims data from the US while factory orders topped forecast.
“We expect Rupee to trade with a negative bias on rising crude oil prices and some recovery in US Dollar from lower levels. FII outflows and concerns over global economic slowdown may also put pressure on Rupee,” he said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.01 per cent to 102.53.
Brent crude futures, the global oil benchmark, advanced by 0.68 per cent to USD 85.72 per barrel.
On the domestic equity market front, the 30-share BSE Sensex closed 480.57 points or 0.74 per cent higher at 65,721.25 points. The broader NSE Nifty advanced 135.35 points or 0.7 per cent to close at 19,517.00 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital market on Friday as they offloaded shares worth Rs 556.32 crore, according to exchange data. PTI
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