The rupee on Wednesday closed 32 paise lower at 74.37 against the US currency, weighing on a muted trend in domestic equities and firmness of the US currency in the overseas market.
At the interbank forex market, the local currency opened at 74.11 and saw a high of 74.06 and a low of 74.42 against the US Dollar in the day’s trade.
The local unit finally closed at $74.37 a dollar, down 32 paise from its previous close. On Tuesday, the rupee had closed at 74.05 against the US dollar.
According to Emkay Global Financial Services, “Inflation concerns are rising globally and as we move forward with the week, IPO related flows may dry up, keeping USD/INR afloat”.
The major catalyst for the forex market is US inflation data. A lower-than-expected CPI figure would reflect a ‘transient’ factor, however, higher-than-expected data or a figure in line with market consensus would prompt the Fed to accelerate the pace of asset purchases, saying that “we Expect USD/INR spot to trade between 73.75-74.50”.
Meanwhile, global oil benchmark Brent crude futures fell 0.06% to 84.73 per barrel.
On the domestic equity market front, the BSE Sensex ended 80.63 points or 0.13% lower at 60,352.82, while the broader NSE Nifty fell 27.05 points or 0.15% to end at 18,017.20.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading up 0.19% at 94.13.
Foreign institutional investors were net sellers in the capital markets on Tuesday as they sold shares worth Rs 2,445.25 crore, according to exchange data.
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