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Rupee Declines by 6 Paise to 71.37 as Crude Oil and Dollar Gain

Image for representation. (Image : Reuters)

Image for representation. (Image : Reuters)

Forex traders said the rupee consolidated in a narrow range as strengthening of the US dollar, rise in crude oil prices and heavy selling in domestic equities weighed on the local unit.

  • PTI
  • Last Updated: February 14, 2020, 6:55 PM IST
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Mumbai: The rupee on Friday fell by 6 paise to close at 71.37 against the US dollar tracking heavy selling in domestic equities and strengthening of the American currency in the overseas market.

Forex traders said the rupee consolidated in a narrow range as strengthening of the US dollar, rise in crude oil prices and heavy selling in domestic equities weighed on the local unit.

At the interbank foreign exchange market, the local currency opened on a positive note at 71.29. During the day, it lost ground and touched a low of 71.41 and finally settled 6 paise lower at 71.37 against the US currency.

The domestic unit had settled at 71.31 against US dollar on Thursday.

On a weekly basis, the rupee has gained 3 paise.

"Along with stronger American dollar, series of weak domestic economic data and higher crude oil prices weighed on Indian rupee in today's session," said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities.

Sharma further noted that "spot USDINR has been consolidating in the range of 70.70 to 71.12, the high and low of January months. We believe rupee can hold the same range this month in absence of new triggers".

Forex traders said market participants will await cues from Iranian election, EU budget, India trade balance and Japan GDP in the coming week.

"From the US, market participants will be keeping an eye on retail sales number; expectation is that the number could come in better-than-previous month and that could extend gains for the dollar. We expect the USDINR(Spot) to quote in the range of 71.20 and 71.80," said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.05 per cent to 99.11.

The 10-year Indian government bond yield was at 6.37 per cent.

Meanwhile, Brent crude rose 1.40 per cent to trade at USD 57.13 per barrel.

On the domestic equity market front, the 30-share BSE Sensex fell by 202.05 points or 0.49 per cent to end at 41,257.74, with 22 of its constituents closing with losses.

The broader NSE Nifty shed 61.20 points or 0.50 per cent to settle at 12,113.50 as banking, auto, FMCG and energy counters retreated.

Foreign institutional investors sold equities worth Rs 704.92 crore on a net basis on Friday, according to provisional exchange data.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.4699 and for rupee/euro at 77.7049. The reference rate for rupee/British pound was fixed at 92.5626 and for rupee/100 Japanese yen at 65.09.

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