Indian Rupee Falls 7 Paise Against US Dollar As American Currency Strengthens

The Indian rupee experienced a decline of 7 paise to conclude at 82.75 (provisional) against the US dollar on Thursday. The currency was influenced by the strength of the American currency in international markets. Starting at 82.76 against the dollar at the interbank foreign exchange, the rupee eventually settled at 82.75 (provisional), marking a 7 paise decrease compared to its previous closing value.

Throughout the day, the rupee fluctuated, reaching a high of 82.70 and a low of 82.78 against the US dollar. The rupee had finished at 82.68 per dollar on Wednesday.

The dollar index, a gauge of the US currency's strength against a basket of six major currencies, rose by 0.13 percent, reaching a level of 104.02.

Brent crude futures fell 1.47 percent to USD 77.21 a barrel, the global oil benchmark.

The rupee declined due to weak local stocks and a strong US dollar, according to Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas.

As market confidence has deteriorated due to the debt ceiling deadlock, the US dollar has risen to a 10-week high and broke 104 levels on safe-haven demand. The greenback was also bolstered by hawkish Fedspeak.

"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.

FII inflows, on the other hand, may boost the rupee at lower levels.

Traders may stay cautious ahead of statistics on US GDP, weekly unemployment claims, and pending home sales in the United States. Investors should also keep an eye on the status of the debt ceiling negotiations."We expect the USD/INR spot to trade between 82.30 to 83.30 in the near term," he added.

The domestic equity market witnessed a positive close as the 30-share BSE Sensex ended higher by 98.84 points or 0.16 percent, reaching 61,872.62 points. Similarly, the broader NSE Nifty saw an increase of 35.75 points or 0.2%, settling at 18,321.15 points.

Exchange data revealed that Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday, acquiring shares worth Rs 1,185.84 crore.