Rupee remains under pressure, slips to 95.95 against dollar

The rupee declined 7 paise to 95.95 against the US dollar on Wednesday, extending its losing streak to seven sessions. Dollar strength and foreign fund outflows weighed on the currency, while positive domestic equities helped limit the decline

Mumbai: The rupee stayed weak for the seventh consecutive session, declining 7 paise to 95.95 (provisional) against the US dollar on Wednesday, tracking a strong greenback overseas and foreign fund outflows.

Forex traders said the rupee’s slide was capped by positive domestic equity markets, even as crude oil prices remained elevated amid the escalating US-Iran conflict.

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At the interbank foreign exchange market, the rupee opened at 95.89 and moved in a range of 95.85 to 95.98 against the greenback. The unit finally settled 7 paise lower at 95.95 (provisional) against the US dollar.

The local unit ended 34 paise lower at 95.88 against the US dollar on Tuesday, after weakening by 113 paise, or more than 1 per cent, in the preceding five sessions from the closing level of 94.43 on September 4.

Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the local currency declined amid a stronger dollar ahead of the Federal Open Market Committee (FOMC) decision.

“Elevated crude oil prices and rising US Treasury yields also pressurised the rupee. Rising crude oil prices have led to higher demand for dollars by importers. However, positive domestic markets cushioned the downside,” Choudhary said, adding that the “USD-INR spot price is expected to trade in a range of Rs 95.75 to Rs 96.20”.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.04 per cent higher at 99.38.

The dollar gained strength amid market expectations of an interest rate hike by the US Federal Reserve, which was to announce its monetary policy decision later in the day.

Brent crude, the global oil benchmark, was trading 1.14 per cent lower but remained elevated at USD 107.51 per barrel in futures trade.

According to analysts, oil prices surged as the West Asia conflict flared up following attacks by Iranian-backed Houthi rebels in Yemen against Saudi Arabia’s shipping and infrastructure. Traders fear the escalating conflict could disrupt Saudi oil exports through the Red Sea.

In domestic equities, the Sensex rose 332.63 points, or 0.45 per cent, to settle at 74,336.45, while the Nifty advanced 99 points, or 0.43 per cent, to 23,217.60.

Foreign institutional investors (FIIs) offloaded equities worth Rs 2,977.86 crore on a net basis on Tuesday, according to exchange data.