Rupee drops 17 paise to 85.90 against dollar amid strong greenback, weak equities

The rupee weakened by 17 paise to 85.90 against the US dollar on Wednesday due to a stronger greenback and weak domestic equities. A dip in Brent crude prices helped limit further losses. FIIs sold Rs 26 crore worth of shares.

Mumbai: The rupee declined 17 paise to 85.90 against the US dollar in early trade on Wednesday amid a strengthening greenback and subdued sentiments in the domestic equity markets.

However, easing global crude oil prices, which had gone up overnight, capped steeper losses in the local unit, according to forex traders.

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At the interbank foreign exchange, the rupee opened at 85.84 against the greenback before slipping further to 85.90, down 17 paise from its previous close.

The rupee rose 21 paise to close at 85.73 against the US dollar on Tuesday.

“The Brent oil prices reached a two-week high at USD 70.15 per barrel driven by supply concerns from fresh Houthi attacks on Red Sea shipping lanes. However, the prices fell slightly as the American Petroleum Institute reported an unexpected rise in crude oil inventories with a build up of 7.1 million barrels,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

“The rupee gained (on Tuesday) on expectations of an announcement of the US-India mini trade deal but none came through overnight. The currency is expected to trade in the range of 85.50-86.00,” he said.

Brent crude, the global oil benchmark, which rose overnight, dipped marginally by 0.14 per cent to USD 70.05 per barrel in futures trade.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was up 0.17 per cent to 97.68.

Meanwhile, at the domestic equity markets, the Sensex declined 170.42 points to 83,542.09 in early trade on Wednesday, while the Nifty was down 44.35 points to 25,478.15.

Foreign institutional investors (FIIs) offloaded equities worth Rs 26.12 crore on a net basis on Tuesday, according to exchange data.