The rupee pared most of its initial losses and closed with a marginal 2 paise drop at 68.94 against the U.S. dollar on July 23 amid strengthening of the greenback against major currencies and sustained foreign fund outflows.
A weak trend in domestic equity markets also weighed on investor sentiment.
At the interbank foreign exchange (Forex) market, the domestic currency opened at 68.98 a dollar and touched a high of 68.90 and low of 69.05 during the day.
The local unit finally closed at 68.94 against the American currency, down 2 paise over its previous close.
On July 22, the rupee had settled at 68.92 against the U.S. dollar.
“Rupee settled for the day lower by 2 paise against dollar amid sustained foreign fund outflows and weak domestic equity markets,” said V.K. Sharma, Head PCG & Capital Markets Strategy, HDFC Securities.
Brent crude futures, the global oil benchmark, fell 0.55% to trade at $62.91 per barrel.
Foreign investors sold shares worth ₹2,607.97 crore on a net basis on Tuesday, provisional data showed.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose by 0.22% to 97.47.
“Strengthening of the U.S. Dollar against other currencies overseas kept pressure on the Indian Rupee. ICE Dollar Index has been rising for last 3 consecutive days, marking the highest level since 18th June 2019,” Sharma said.
Meanwhile, the 10-year government bond yield was at 6.46% on Tuesday.
Going ahead, global cues like ECB meeting on July 25, the U.S. Q2 preliminary GDP print on July 26 and the FOMC meeting on July 31, are expected to impact rupee movement, traders said.
Equity benchmarks Sensex and Nifty clocked losses for a fourth straight session on July 23. The 30-share index ended 48.39 points, or 0.13%, lower at 37,982.74. The broader NSE Nifty slipped 15.15 points or 0.13% to close at 11,331.05.
Meanwhile, Financial Benchmark India Private Ltd. (FBIL) set the reference rate for the rupee/dollar at 69.0199 and for rupee/euro at 77.4215. The reference rate for rupee/British pound was fixed at 86.2956 and for rupee/100 Japanese yen at 63.94.
