Rupee settles 17 paise down at 71 amid rising crude oil prices, fag-end selling in domestic equities
The rupee reversed all its early gains and settled 17 paise down at 71.00 against the US currency on Monday, following rising crude oil prices and fag-end selling in domestic equities
At the interbank foreign exchange market, the rupee had opened at 70.80 against the US dollar
Later, the local unit lost ground and fell to the day's low of 71.03
The domestic unit finally settled at 71.00, registering 17 paise decline over the previous closing
Mumbai: The rupee reversed all its early gains and settled 17 paise down at 71.00 against the US currency on Monday, following rising crude oil prices and fag-end selling in domestic equities.
Forex traders said the rupee ended the day in the negative territory after inflows related to Essar steel got completed.
At the interbank foreign exchange market, the rupee had opened at 70.80 against the US dollar. Later, the local unit lost ground and fell to the day's low of 71.03.
The domestic unit finally settled at 71.00, registering 17 paise decline over the previous closing. On Friday, the rupee had settled at 70.83 against the American currency.
"Indian rupee declined after strengthening to the highest level since September as inflows related to Essar steel completed. Rupee should weaken from here on the expectation of hedging dollar demand from importers.
"Domestic Economic data are coming weaker and requires multiple steps to back on growth track," said V K Sharma, Head - PCG & Capital Market Strategy, HDFC securities.
In near term, spot USD/INR has support at 70.29 and resistance at 71.24, the 200 and 50 days simple moving average respectively, he added.
On the domestic market front, the BSE benchmark Sensex closed 70.99 points, or 0.17 percent, down at 40,938.72. Similarly, the broader NSE Nifty slipped 26 points, or 0.22 percent, to end at 12,060.70.
Foreign institutional investors (FIIs) remained net buyers in the capital markets, as they purchased shares worth Rs 115.70 crore on Friday, exchange data showed.
"Strong flows along with RBI's interventions have helped the INR in recent weeks though world-wide events, mainly Brexit and the sudden show of camaraderie between US and China, could lend some relief rally strength to the USD as the new year starts," said Rajesh Cheruvu, Chief Investment Officer, Validus Wealth.
Forex traders said weak macro economic numbers also weighed on the domestic unit.
Rising food prices pushed the retail inflation in November to over three-year high of 5.54 percent, while the industrial sector output shrank for third month in a row by 3.8 percent in October.
Brent futures, the global oil benchmark, rose 0.09 percent to $65.28 per barrel.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.15 percent to 97.02.
The 10-year government bond yield was at 6.78 percent on Monday.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 70.7178 and for rupee/euro at 78.9748. The reference rate for rupee/British pound was fixed at 95.2767 and for rupee/100 Japanese yen at 64.53.
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