Rupee Closes Lower At 71.81 Against Dollar: 10 Things To Know

Rupee vs dollar: Weak Asian currencies following a flare-up in US-China tensions weighed on traders sentiments, analysts said.

Rupee Closes Lower At 71.81 Against Dollar: 10 Things To Know

On Tuesday, the rupee had closed at 71.71 against the dollar.

The rupee depreciated by 10 paise to close at 71.81 against the dollar on Wednesday. Weak Asian currencies following a flare-up in US-China tensions weighed on trader sentiments, analysts said. However, fresh foreign fund inflows and a rally in domestic stock markets restricted the fall for the rupee, they added. After opening lower at 71.80 against the greenback, the currency fell as much as 71.91 in intra-day deals. On Tuesday, the rupee had closed at 71.71 against the dollar.

Here are 10 things to about rupee:

  1. According to  V K Sharma, Head - PCG & Capital Market Strategy, HDFC Securities, the rupee is coming under selling pressure following weaker Asian currencies and dollar buying by foreign banks.

  2. "Foreign fund outflows from domestic equity market in last few days and weaker economic data also weighed on the rupee," Mr Sharma said.

  3. The dollar strengthened while emerging market currencies wobbled after US President Donald Trump on Tuesday warned that failure to get a trade deal with China will prompt more tariffs. 

  4. Beijing has also hit out against a US legislation on human rights in Hong Kong, saying Washington should stop interfering in China's internal affairs. 

  5. The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.15 per cent to 97.99. 

  6. According to Gaurang Somaiyaa, Forex and Bullion Analyst, Motilal Oswal Financial Services, "rupee consolidated in a narrow range but came under pressure in the latter half of the session after US president threatened to raise tariffs on China if no deal is reached with China." 

  7. Market participants also remained a little cautious ahead of the important FOMC meeting minutes, he added. 

  8. Foreign institutional investors (FIIs) bought shares worth a net Rs 566.52 crore on Wednesday, provisional exchange data showed. 

  9. Meanwhile, market benchmark BSE Sensex ended 182 points or 0.45 per cent higher at 40,652 and the NSE Nifty 50 index climbed 59 points or 0.5 per cent higher to close at 11,999.

  10. "On the domestic front, a much talked about Essar acquisition by Arcelor Mittal shall bring estimated inflow of $5-7 billion into India to recapitalize and pay off company's debt. This should ideally help strengthen the rupee by as much as 1-2 per cent, or at least check any sharp depreciation in its value if the global trends turn adverse, " said Amit Pabari, Managing Director, CR Forex.


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