The rupee depreciated 42 paise to 82.50 against the U.S. dollar in early trade on February 6, weighed down by a strong American currency and a muted trend in domestic equities.
Sustained foreign fund outflows and firm crude oil prices further dented investor sentiments, Forex traders said.
At the interbank foreign exchange, the domestic unit opened weak at 82.35 against the dollar, then fell to 82.50, registering a decline of 42 paise over its last close.
In the previous session on Friday, the rupee settled at 82.08 against the U.S. dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.17% to 103.09.
Brent crude futures, the global oil benchmark, advanced 0.25% to %80.14 per barrel.
The rupee started this Monday on a weaker note against the dollar after a better-than-expected U.S. jobs report prompted investors to bet on more Federal Reserve rate increases, said Sriram Iyer, Senior Research Analyst at Reliance Securities.
Supports for the USD/INR spot pair are at 81.9100 and 81.6000, and resistances are at 82.5000 and 82.7500 and the pair could remain within the levels this Monday, Mr. Iyer said.
The key trigger for the markets will be the RBI MPC meeting for February this week, however further gains in the greenback could weigh on sentiments, Mr. Iyer added.
The Reserve Bank is likely to settle for a smaller 25 basis points repo rate hike in its forthcoming bi-monthly monetary policy due later this week, as retail inflation is showing signs of softening and the U.S. Fed moderating the pace of increase in its benchmark interest rate.
In the domestic equity market, the 30-share BSE Sensex was trading 242.95 points or 0.40% lower at 60,598.93. The broader NSE Nifty declined 100.20 points or 0.56% to 17,753.85.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Feb. 3 as they offloaded shares worth ₹932.44 crore, according to exchange data.
