Rupee Declines For 4th Straight Session, Settles Lower At 73.07 Against Dollar

Continuing its losing streak for the fourth straight session, the rupee declined by one paise against the US dollar on Friday, June 11, to settle at 73.07 amid stronger American currency and rising crude oil prices. At the interbank foreign exchange market, the local unit opened at 72.97 against the dollar amid its previous close of 73.06 and swung in the range of 72.91 to 73.09 during the day. The domestic unit has lost 27 paise in the last four trading sessions.

On a weekly basis, the local unit declined eight paise against the dollar. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.15 per cent to 90.21. On Thursday, June 10, the rupee slipped by nine paise to settle at 73.06 against the greenback. On Wednesday, June 9, the local unit declined by eight paise against the dollar to settle at 72.97. 

"The focus now turns on the big final event, the Fed's meeting next week, although there may not be much of a shift in rhetoric. If Fed hints that tapering discussion may be closer than before, a knee-jerk spurt may be witnessed in USDINR spot, but Fed won't rush into tightening the stimulus so overall the dollar will remain soft,'' said Mr. Rahul Gupta, Head Of Research- Currency, Emkay Global Financial Services.

''The stronger inflow into the domestic equity market could limit the upside in the pair for a while and RBI's continuous spot intervention could limit the downside upto 72.50-70 levels. Overall, we expect that the USDINR pair should trade in the tight range of 72.50-73.20 zone before any big trigger gives a breakout on either side. However, the chances of upper side breakout are higher as RBI's buy spot, sell forward swap could not allow further downside,'' said Amit Pabari, MD, CR forex.

On the domestic equity market front, the BSE Sensex ended 174.29 points or 0.33 per cent higher at 52,474.76, while the broader NSE Nifty advanced 61.60 points or 0.39 per cent to 15,799.35.

“Taking cue from decline in Covid cases, stock markets in India remained resilient this week. BSE Sensex and Nifty 50 continued to make record highs during the week. Both BSE Sensex and Nifty 50 moved up by 0.8% each in the week. Market rally remained broad based with healthy rally witnessed in BSE Midcap and BSE Smallcap index. Majority of the sectoral indices moved in the positive direction,'' said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.

According to provisional data, the foreign institutional investors (FIIs) remained net buyers in the capital markets, as they purchased shares worth Rs 1,329.70 crore on June 10. Brent crude futures, the global oil benchmark, rose 0.22 per cent to $ 72.68 per barrel.