Rupee falls 7 paise to close at 82.75 against US dollar

Mumbai, May 25 (PTI) The rupee fell 7 paise to close at 82.75 (provisional) against the US dollar on Thursday, weighed down by the strength of the American currency in the overseas market.

At the interbank foreign exchange, the domestic unit opened at 82.76 against the dollar, and finally settled at 82.75 (provisional), down 7 paise from its previous close.

During the day, the rupee touched a high of 82.70 and a low of 82.78 against the greenback.

On Wednesday, the rupee had settled at 82.68 against the dollar.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.13 per cent to 104.02.

Brent crude futures, the global oil benchmark, declined 1.47 per cent to USD 77.21 per barrel.

According to Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas, the rupee depreciated on weak domestic equities and a strong US Dollar.

The US Dollar has surged to a 10-week high and breached 104 levels on safe-haven demand as the debt ceiling impasse has deteriorated market sentiments. Hawkish fedspeak also supported the greenback.

“We expect the rupee to trade with a negative bias on risk aversion in global markets and a strong US Dollar. The debt ceiling deadlock is worrying the markets as the June 1 deadline is nearing. Recovery in crude oil prices over the past few days may also weigh on the domestic currency,” Choudhary said.

However, FII inflows may support the rupee at lower levels.

Traders may remain cautious ahead of US GDP, weekly unemployment claims and pending home sales data. Investors may also watch out for progress on the debt ceiling negotiations. “We expect the USD/INR spot to trade between 82.30 to 83.30 in the near term,” he added.

On the domestic equity market front, the 30-share BSE Sensex closed 98.84 points or 0.16 per cent higher at 61,872.62 points. The broader NSE Nifty advanced 35.75 points or 0.2 per cent to 18,321.15 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday as they purchased shares worth Rs 1,185.84 crore, according to exchange data.