Rupee plunges 17 paise to settle at over 2-month low of 83.61 against US dollar

Rupee plunges 17 paise to settle at over 2-month low of 83.61 against US dollar

Mumbai: The rupee plunged 17 paise to settle at over two-month low level of 83.61 (provisional) against the US dollar on Thursday amid surging crude oil prices due to renewed geopolitical tensions in the Middle East, even though the domestic equity markets hit fresh peaks.

According to forex traders, inflow of foreign capital and positive momentum in domestic equity markets failed to support the local unit which gave in to the pressure due to a firm American currency against major rivals overseas.

At the interbank foreign exchange market, the local unit opened at 83.43 and touched the intra-day high of 83.42 against the greenback.

During the session, the currency hit an all-time low of 83.68 against the dollar. The rupee finally settled at 83.61 (provisional) against the dollar, registering a steep fall of 17 paise from its previous close.

On Wednesday, the rupee settled 1 paisa lower at 83.44 against the US dollar.

Earlier, the domestic currency closed at 83.61 against dollar on April 16 this year.

Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said the rupee depreciated on strong US dollar and mixed to weak Asian markets.

“Traders may take cues from weekly unemployment claims, building permits, Philly Fed manufacturing index, housing starts and current account data from the US. USD-INR spot price is expected to trade in a range of Rs 83.30 to Rs 83.80,” Choudhary said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.21 per cent at 105.10.

Strength in the US dollar was attributed to elevated geopolitical tensions as Russia resumed its aerial pounding of Ukraine’s power grid and Kyiv’s forces again targeted Russian oil facilities with cross-border drone strikes.

Brent crude futures, the global oil benchmark, advanced 0.18 per cent to USD 85.22 per barrel.

“Oil prices are stuck in a range but holding firm above USD 80 per barrel in the overseas market, supported by forecast of bullish demand outlook for rest of the year and higher US fuel demand during the current summer driving season, but gains are capped by higher global oil inventories,” said Pranav Mer, Vice President, EBG – Commodity & Currency Research, JM Financial Services Ltd.

In the domestic equity markets, the 30-share BSE Sensex climbed 141.34 points, or 0.18 per cent, to close at a fresh peak of 77,478.93 points. The broader NSE Nifty rose 51.00 points, or 0.22 per cent, to hit its lifetime high of 23,567.00 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday, as they purchased shares worth Rs 7,908.36 crore, according to exchange data.