Rupee Continues Losing Streak, Settles Lower To 74.71 Against Dollar: Here's Why

Edited by Nikita Prasad

08 Jul 2021, 04:29 PM IST

Rupee Vs Dollar Today: The rupee settled at 74.41 against the dollar

Continuing its losing streak amid rising crude oil prices, the rupee fell nine paise against the US dollar on Thursday, July 8, and settled at 74.71 (provisional), also tracking weaker domestic equities today, which weighed on investor sentiment. At the interbank foreign exchange market, the local unit opened weak at 74.75 against the dollar and hovered in a range of 74.84 to 74.65 throughout the session. In an early trade session, the domestic unit declined 17 paise to 74.79 against the greenback.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.18 per cent to 92.47. On Wednesday, July 7, the local unit settled at 74.62 against the American currency.

''Till now, flipping updates on the monetary policy had kept the dollar on edge. However, re-assurance by the central bank through its minutes that it may move towards tapering its asset purchases probably by this year, took the dollar at a 13 week high of 92.70 levels,'' said Mr Amit Pabari, MD, CR Forex

''Open market purchase of government bonds worth ₹20,000 crores under the G-sec Acquisition Programme could keep the rupee under pressure. The only bright spot for the rupee could be the upcoming FII inflows on account of IPO's. Considering the global dollar strength and prospects of inflows the rupee is expected to move in a range of 74.50-75.20 levels for the near term with a steady upside bias,'' he added.

“A typical risk off day was for the rupee pairs. Though rupee only lost 13 paise against USD with July futures of USDINR closing at 74.95, it was currencies like Euro and Yen which gained most against the rupee,'' said Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities

''Funding currencies of carry trade, Euro and JPY are strengthening against higher-yielding currencies from emerging markets. Bias remains upward for USDINR. We expect a range of 74.75 to 75.20 over tomorrow. We may get to see some IPO-related flows, which may cap the upside temporarily,'' added Anindya Banerjee.

On the domestic equity market front, the BSE Sensex ended 485.82 points or 0.92 per cent lower at 52,568.94, while the broader NSE Nifty declined 151.75 points or 0.96 per cent to 15,727.90.

According to exchange data, the foreign institutional investors were net buyers in the capital market on July 7 as they bought shares worth Rs 532.94 crore. Brent crude futures, the global oil benchmark, fell 0.68 per cent to $ 72.93 per barrel.