Rupee edges 2 paise lower at 73.52 against US dollar

Mumbai, Sep 16 (PTI) The rupee closed marginally lower at 73.52 against the American currency on Thursday, tracking a rebound in the US dollar index.

Forex traders said a bullish trend in the domestic equities and sustained foreign fund inflows supported the local unit, but firm crude oil prices and stronger dollar against key currencies weighed on overall sentiment.

At the interbank foreign exchange market, the domestic currency opened flat at 73.51, witnessed an intra-day high of 73.34 and a low of 73.52 against the American currency during day trade.

The local unit finally settled for the day at 73.52, down 2 paise over its previous close.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.24 per cent higher at 92.77.

Brent crude futures, the global oil benchmark fell 0.07 per cent to USD 75.41 per barrel.

“Rupee rose in the first half of the session following sharp gains in domestic equities and suspected fund flows. But in the latter half, the currency fell as the dollar rose against its major crosses,” said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.

Somaiyaa further said that the focus will be on the retail sales number that will be released from the US.

“Expectation is that contraction could be lower in August compared to the previous month, and help the dollar extend gains. We expect the USDINR (Spot) to trade sideways and quote in the range of 73.20 and 73.80,” he said.

According to Sriram Iyer, Senior Research Analyst at Reliance Securities, the Indian rupee ended flat against the US dollar as fresh highs in local equities offset dollar demand from importers.

The unit briefly appreciated to an intraday of 73.34 earlier in the session aided by foreign inflows, but gave up most of its gains tracking the strength of the dollar.

“In the overseas markets, the dollar index rebounded this Thursday afternoon trade in Asia as traders looked to next week’s Federal Reserve policy meeting for indications on how soon the US central bank will start to taper stimulus,” Iyer said.

On the domestic equity market front, the BSE Sensex ended 417.96 points or 0.71 per cent higher and touched life-time high of 59,141.16, while the broader NSE Nifty advanced 110.05 points or 0.63 per cent to record 17,629.50.

Foreign institutional investors were net buyers in the capital market on Wednesday as they purchased shares worth Rs 232.84 crore, as per exchange data.