Rupee Declines To 73.42 Against Dollar On Surge In Crude Oil Prices

Rupee Vs Dollar Rate: At the interbank foreign exchange market, the domestic unit opened lower at 73.51 against the dollarand traded in the range of 73.39 to 73.51 through the session.

Rupee Declines To 73.42 Against Dollar On Surge In Crude Oil Prices

Rupee Vs Dollar Today: The rupee settled at 73.42 against the dollar

The rupee depreciated by eight paise against the US dollar on Wednesday, May 12, to settle at 73.42 (provisional) tracking a surge in crude oil prices and risk aversion in the global markets. At the interbank foreign exchange market, the domestic unit opened lower at 73.51 against the dollar and traded in the range of 73.39 to 73.51 through the session. In an early trade session, the local unit slipped 17 paise to 73.51 against the greenback. The domestic currency finally ended at 73.42 against the dollar, registering a drop of eight paise over its previous closing of 73.34.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, increased 0.14 per cent to 90.26. ''The USD/INR exchange rate opened the day at 73.60 up by 0.07 paisa against USD from the previous day's close. Due to correction in the global equity market and economic realities in the current situation price may remain firm in today's session. The growing fiscal deficit and bleak growth prospects amid inflation fears may cause the domestic currency's uptrend to be reversed at some point, with a potential drop to the 73.80 level in the coming sessions,'' said Kshitij Purohit, Lead International Products & Commodities at CapitalVia Global Research Limited.

"After a blowout of US NFP data, the test case on US inflation has come back again and the anxiety is jolting the global risk appetite. Traders are gravitating around the dollar as the market expects US CPI to rise by 3.6 per cent in April, largest increase in almost a decade. If the inflation figure comes in line with market expectations then bets for a monetary tightening sooner than expected will push the USDINR spot prices even higher,'' said Mr. Rahul Gupta, Head Of Research- Currency, Emkay Global Financial Services.

''But if it falls short of the forecast, then dollar will continue to remain subdued with a downside pressure on USDINR spot. The new trading range in spot has shifted to 73-74, and this may continue until the market gets new catalyst to react to,'' added Mr Gupta.

On the domestic equity market front, the BSE Sensex ended 471.01 points or 0.96 per cent lower at 48,690.80, while the broader NSE Nifty slipped by 154.25 points or 1.04 per cent to 14,696.50.

''In the past whenever the market has opened lower on the day of the weekly expiration of contracts, the Nifty/Sensex closed in the negative territory with hefty losses. Today, we witnessed a similar sort of activity and India's benchmark indices were closed in red with losses of over one per cent.  There was heavy unwinding in long positions of Metal stocks ahead of the bank holiday, while the Auto, Pharmaceutical and Mid-Cap stocks found selective buying,'' said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.

“Nifty remains in momentum uptrend with support zone seen at 14400-14500; on the higher side 15000-15100 is expected. Breach of 14400 is expected to result in increased volatility. We expect positive bias to continue with action seen in the AUTO, Realty and select midcap stock; Metals are expected to witness high volatility,'' said Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities.

According to provisional data, the foreign institutional investors (FIIs) remained net sellers in the capital markets, as they pulled out Rs 336.00 crore on May 11. Brent crude futures, the global oil benchmark, were trading 0.55 per cent up at $ 68.93 per barrel.