Rupee falls 14 paise to close at 82.19 against US dollar

Mumbai: The rupee fell 14 paise to close at 82.19 (provisional) against the US dollar on Thursday, pulled down by a strong greenback overseas and a negative trend in domestic equities.

Forex traders said the rupee depreciated slightly on recovery in the US dollar after the US Fed left key interest rate unchanged, but hinted more rate hikes this year.

However, FII inflows and weak crude oil prices supported the rupee at lower levels, they added.

At the interbank foreign exchange, the domestic unit opened at 82.16 against the dollar, and finally settled at 82.19 (provisional), down 14 paise from its previous close.

During the day, the rupee touched a high of 82.02 and a low of 82.25 against the greenback.

On Wednesday, the rupee had settled at 82.05 against the dollar.

The dollar index, which gauges the greenback's strength against a basket of six currencies, advanced 0.09 per cent to 103.03.

The US Dollar recovered on Thursday after hawkish guidance by US Federal Reserve. It forecast terminal rates at the 5.6-5.75 per cent range, higher than the 5.1-5.25 per cent range earlier, indicating another 50 bps rate hike on the cards in 2023, said Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas.

The Federal Open Market Committee (FOMC) paused the rate hike in its June meeting on Wednesday and kept the interest rates unchanged at the 5-5.25 per cent range.

"We expect the rupee to trade with a slight negative bias on positive tone in the US Dollar and weak domestic markets. However, the weak tone in crude oil prices and foreign inflows may support the rupee at lower levels," Choudhary said.

Choudhary added that "traders may remain cautious ahead of India's trade balance data today. Market participants may also remain cautious ahead of retail sales, weekly unemployment claims, industrial production and Empire State manufacturing index data from the US. We expect USD/INR spot to trade in between 81.70 to 82.50 in the near term".

Brent crude futures, the global oil benchmark, rose 0.98 per cent to USD 73.92 per barrel.

On the domestic equity market front, the 30-share BSE Sensex closed 310.88 points or 0.49 per cent lower at 62,917.63. The broader NSE Nifty declined 67.80 points or 0.36 per cent to 18,688.10.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday as they purchased shares worth Rs 1,714.72 crore, according to exchange data.