Rupee settles 6 paise lower at 74.90 against US dollar

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Mumbai, Aug 14: The rupee on Friday slid 6 paise to end at 74.90 against US dollar as data showing slow economic recovery and higher inflation dampened forex market sentiment.

At the interbank forex market, the local unit opened at 74.85 and then lost further ground to settle at 74.90, registering a decline of 6 paise over its previous close of 74.84 to the US dollar.

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During the session, the rupee witnessed an intra-day high of 74.74 and a low of 74.93 against the greenback.

On weekly basis, the rupee inched up 3 paise against the US dollar.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.05 per cent lower at 93.29.

Brent crude futures, the global oil benchmark, fell 0.67 per cent to USD 44.66 per barrel.

“Forex markets are muted since last two days. US phase 4 fiscal stimulus negotiations have moved nowhere and Indian economic data showed a slower recovery and higher inflation,” said Devarsh Vakil, Deputy Head Retail Research, HDFC Securities.

CPI data showed inflation for July stood at 6.93 per cent, compared to a revised estimate of 6.23 per cent in June 2020.

Wholesale price-based inflation declined 0.58 per cent in July, even as food items turned costlier. WPI inflation in June was at (-) 1.81 per cent, according to official data.

On the domestic equity market front, the BSE benchmark Sensex closed 433.15 points or 1.13 per cent lower at 37,877.34 and the NSE Nifty slumped 122.05 points or 1.08 per cent to close at 11,178.40.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 46.39 crore on Friday, exchange data showed.

“Rupee consolidated in a narrow range for the first half of the session but came under pressure in the latter half after domestic equities witnessed sell-off following an uptick in inflation,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

From the US, market participants will be keeping an eye on the industrial production and retail sales number and weaker-than-expected economic data could keep the greenback weighed down, Somaiya said.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 74.8369 and for rupee/euro at 88.5500. The reference rate for rupee/British pound was fixed at 97.8478 and for rupee/100 Japanese yen at 70.17.