Rupee slips 13 paise to 73.41 against US dollar in early trade

The decline in the Index of Industrial Production (IIP) was 10.8 per cent in July. The contraction in August stood at 8 per cent, as per the latest data.

Mumbai: The rupee depreciated 13 paise to 73.41 against the US dollar in opening trade on Tuesday tracking strengthening American currency.

The Indian currency opened at 73.41 against the US dollar at the interbank forex market, down 13 paise over its previous close.

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On Monday, rupee settled at 73.28 against the greenback.

Forex traders said investors are cautious following muted domestic macro-economic data. Rising food prices pushed retail inflation to an eight-month high of 7.34 per cent in September, above the RBI’s comfort level, while industrial output continued to contract in August, official data showed on Monday.

The decline in the Index of Industrial Production (IIP) was 10.8 percent in July. The contraction in August stood at 8 percent, as per the latest data.

“The August industrial production missed estimates, coming in at (-) 8 per cent year-on-year (expected – 7.8 per cent). Given that the Reserve Bank is prioritising growth over inflation, the markets may read more into the IIP data than the CPI data,” said Abhishek Goenka, Founder and CEO, IFA Global.

“We expect the USD-INR to spend a few more sessions in the 72.90-73.90 range,” Goenka added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, surged 0.10 per cent to 93.16.

On the domestic equity market front, the BSE benchmark Sensex was trading 147.46 points higher at 40,741.26, and the broader NSE Nifty rose 48.25 points to 11,979.20.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 615.17 crore on a net basis on Monday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, rose 0.17 per cent to USD 41.79 per barrel.