Rupee slips below 96, recovers to settle 3 paise lower at 95.94

The rupee slipped below 96 against the US dollar in intraday trade before recovering to settle 3 paise lower at 95.94. Likely RBI intervention, softer dollar index and crude prices helped the currency pare initial losses amid global uncertainties

Mumbai: The rupee, which slipped below the 96 level in intraday trade, ended Thursday’s session 3 paise lower at 95.94 (provisional) against the US dollar, paring its initial losses on likely RBI intervention.

The rupee ended almost flat amid a slight fall in the dollar index and crude oil prices, which supported investor sentiment despite global geopolitical volatility.

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According to forex analysts, the local currency, however, remained under pressure due to foreign fund outflows and global trade uncertainties after the House of Representatives cleared a law authorising President Donald Trump to impose tariffs of up to 100 per cent on India and other countries importing Russian oil.

The domestic unit was also weighed down after the US Federal Reserve hiked interest rates for the first time in three years amid rising inflation, they said.

At the interbank foreign exchange market, the rupee opened at 95.88 and hit an intraday low of 96.10, breaching the 96 level for the first time since July 24. The unit recovered during the session and touched a high of 95.78 before settling at 95.94 against the US dollar, 3 paise lower than the previous closing level.

“The Indian rupee experienced a highly volatile trading session on Thursday, initially buckling under a hawkish Fed onslaught and weaker Asian currency sentiment. However, those early losses proved fleeting as aggressive central bank intervention swooped in with heavy-handed dollar defence, pulling the local unit off the canvas to secure marginal gains,” said Dilip Parmar, Senior Research Analyst, HDFC Securities.

Parmar further noted, “Turning to the technical outlook, the spot USD/INR pair remains in an overall upward trend following its recent surge, though we anticipate a period of short-term consolidation with key support around 95.45 and resistance capped at 96.30.”

On Wednesday, the local unit ended 3 paise lower at 95.91 against the American currency, extending its downward trend for the seventh session in a row.

In the preceding six sessions, the rupee had lost 148 paise, or more than 1.4 per cent, from the closing level of 94.43 against the greenback recorded on September 4.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.05 per cent lower at 99.92.

Brent crude, the global oil benchmark, was trading 1.29 per cent lower at USD 104.47 per barrel in futures trade.

In domestic equities, the Sensex fell 21.86 points, or 0.03 per cent, to settle at 74,314.59, while the Nifty ended with a gain of 53.00 points, or 0.23 per cent, at 23,270.60.

Foreign institutional investors (FIIs) offloaded equities worth Rs 2,032.61 crore on a net basis on Wednesday, according to exchange data.