Mumbai: The rupee on Wednesday fell 21 paise to close at 83.39 (provisional) against the US dollar amid negative trend in domestic equities and rise in crude oil prices.
Forex traders said dollar demand from importers and oil marketing companies (OMCs) also weighed on the rupee.
However, foreign inflows into bond markets mitigated the decline ahead of the inclusion of India's government bonds in global bond indices.
At the interbank forex market, the local unit opened at 83.22 and ultimately closed for the day at 83.39 (provisional), 21 paise lower than its previous close.
On Tuesday, the rupee lost initial gains and closed 5 paise lower at 83.1 against the US dollar.“We expect the rupee to trade with a slight downside bias due to month-end dollar demand by OMCs and importers to meet their obligations,” said research analyst Anuj Chaudhary. Global markets remained risk averse and strengthened. The US dollar may put further pressure on the rupee." In Sharekhan by BNP Paribas.
However, fresh foreign inflows into FPI and bond markets may support the rupee at lower levels.
Traders can take cues from the Richmond Manufacturing Index and speeches from US FE officials.Chaudhary said investors may remain cautious ahead of the core PCE price index later this week.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 104.67, 0.05 percent higher, on the back of dovish talk from the Fed and positive economic data from the US.
Brent crude futures, the global oil benchmark, rose 0.78 percent to US$84.8 a barrel.
In the domestic equity market, the 30-share BSE Sensex closed at 74,502.90, down 667.55 points or 0.89 per cent. The broader NSE Nifty fell 183.45 points or 0.8 per cent to 22,704.70.Foreign institutional investors (FIIs) were net buyers in the capital market on Tuesday as they bought shares worth Rs 65.57 crore, according to exchange data.
Forex traders said dollar demand from importers and oil marketing companies (OMCs) also weighed on the rupee.
However, foreign inflows into bond markets mitigated the decline ahead of the inclusion of India's government bonds in global bond indices.
At the interbank forex market, the local unit opened at 83.22 and ultimately closed for the day at 83.39 (provisional), 21 paise lower than its previous close.
On Tuesday, the rupee lost initial gains and closed 5 paise lower at 83.1 against the US dollar.“We expect the rupee to trade with a slight downside bias due to month-end dollar demand by OMCs and importers to meet their obligations,” said research analyst Anuj Chaudhary. Global markets remained risk averse and strengthened. The US dollar may put further pressure on the rupee." In Sharekhan by BNP Paribas.
However, fresh foreign inflows into FPI and bond markets may support the rupee at lower levels.
Traders can take cues from the Richmond Manufacturing Index and speeches from US FE officials.Chaudhary said investors may remain cautious ahead of the core PCE price index later this week.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 104.67, 0.05 percent higher, on the back of dovish talk from the Fed and positive economic data from the US.
Brent crude futures, the global oil benchmark, rose 0.78 percent to US$84.8 a barrel.
In the domestic equity market, the 30-share BSE Sensex closed at 74,502.90, down 667.55 points or 0.89 per cent. The broader NSE Nifty fell 183.45 points or 0.8 per cent to 22,704.70.Foreign institutional investors (FIIs) were net buyers in the capital market on Tuesday as they bought shares worth Rs 65.57 crore, according to exchange data.
