Rupee falls 7 paise to ₹79.89 against U.S. dollar

The rupee declined by 7 paise to close at ₹79.89 (provisional) against the U.S. dollar on Wednesday tracking a strong dollar in overseas markets and losses in the domestic equities.

At the interbank foreign exchange market, the domestic currency opened at ₹79.93 per dollar. It hovered in a range of ₹79.84 to ₹79.94 during the session.

The domestic unit finally settled at ₹79.89, down 7 paise over its previous close of ₹79.82.

Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas said that a strong dollar overseas hit the rupee sentiment.

The U.S. Dollar surged as economic data from the U.S. surprised the markets. The U.S. ISM services PMI unexpectedly rose to 56.9 in August from 56.7 in July.

However, weak crude oil prices and foreign fund inflows cushioned the downside.

“We expect Rupee to remain weak on strong US Dollar and weak cues from global markets. Dollar index surged to a fresh 20-year high and is currently trading around 110.45 levels. Recovery in crude oil prices from lower levels may also weigh on rupee,” Choudhary said.

USDINR spot price is expected to trade in a range of ₹79 to ₹80.50 in the next couple of sessions.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.16% higher at 110.39.

Brent crude futures, the global oil benchmark, advanced by 0.54% to $93.33 per barrel.

On the domestic equity market front, the BSE Sensex ended 168.08 points or 0.28% lower at 59,028.91, while the broader NSE Nifty declined 31.20 points or 0.18% to 17,624.40.

Foreign institutional investors were net buyers in the capital market on Tuesday as they purchased shares worth ₹1,144.53 crore, according to the exchange data.