The rupee declined three paise against the US dollar on Friday, October 22, to settle at 74.90, tracking a muted trend in domestic equities and firm crude oil prices. At the interbank foreign exchange market, the domestic unit opened at 74.82 and registered an intra-day high of 74.69. It witnessed a low of 74.94 during the day's trade. In an early trade session, the local unit inched five paise to 74.82 against the greenback. The rupee settled at 74.90 against the dollar, down three paise against its previous close.
On Thursday, October 21, the local unit settled on a flat note at 74.87 against the American currency. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.18 per cent down at 93.60.
What analysts say:
Mr Amit Pabari, MD, CR Forex:
''The long streak of IPOs and corporate borrowing could be positive points for the rupee and could act on behalf of RBI to calm down the depreciating move beyond the 75.50 mark. In a nutshell, given factors remains unchanged; but their impact could shake up the move.
Any further addition of the fuel in Crude oil's fire, strong recovery in DXY ahead of Fed's Nov tapering, or mean-reverting move in the Indian market could again take the USDINR pair above the 75.50 mark.''
Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities:
"Since the end of September, rupee has been one of the weakest currencies in the world on the back of rising oil prices. However, thanks to lumpy corporate inflows and sharp appreciation in the Chinese currency, the rupee appreciated by nearly a percent against the US dollar.
The gains could have been far bigger if local equity markets had not been under selling pressure this week. Next week, focus will be on oil prices, USDCNH and Nifty. If oil prices continue to climb, with Nifty continuing to slide but USD CNH weak, then USDINR may not have a clear cut direction. It may slip into a range between 74.60 and 75.10 levels on spot.''
Domestic Equity Markets Today:
On the domestic equity market front, the BSE Sensex ended 101.88 points or 0.17 per cent lower at 60,821.62, while the broader NSE Nifty declined 63.20 points or 0.35 per cent to 18,114.90.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Limited:
"Markets are taking cues from volatile global equities and investors back home are booking profits after the recent upsurge even as tug of war continues between bulls and bears intra-day. Technically, on weekly charts benchmark Nifty has formed a bearish candle which supports temporary weakness, although medium-term structure is still positive.''
According to exchange data, the foreign institutional investors were net sellers in the capital market on October 21, as they offloaded shares worth Rs 2,818.90 crore. Brent crude futures, the global oil benchmark, advanced 0.43 per cent to $ 84.97 per barrel.