Rupee Declines For 6th Straight Session, Settles Lower To 73.31 Against Dollar

Registering losses for the sixth session in a row and paring initial gains, the rupee declined by two paise against the US dollar on Tuesday, June 15, to settle at 73.31 (provisional) amid rising crude oil prices and dollar demand from the oil importers. At the interbank foreign exchange market, the local unit opened higher at 73.20 against the dollar and swung in the range of 73.16 to 73.33 throughout the day. However, in an early trade session, the domestic unit gained 13 paise to 73.16 against the greenback, tracking positive domestic equities. .The local unit has lost 51 paise in the six trading sessions to Tuesday, June 15. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.01 per cent to 90.53 ahead of the Federal Reserve meeting that could indicate a change in the outlook for US monetary policy..''The rupee depreciated for a 6th consecutive session against the U.S. dollar, tracking the strong crude oil prices and weak Asian currencies as also closely watching the outcome of the FED meeting scheduled for tomorrow. It also seems that the central bank was present in the market at 73.18 levels as nationalised banks scalped up all inflows from the market,'' said Mr. Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors. ''The inflows of the primary market did not affect the depreciation as the demand for dollars was so strong. The rupee has been under pressure since last Monday when it touched 72.75 as demand from oil companies went up after oil broke through $70 per barrel. A sustained close above 72.95 will ensure that rupee moves up to 73.50 though RBI will ensure it is orderly and does not bring imported inflation into the country,'' added Mr Bhansali..''Domestically, broad dollar strength and rising oil prices have hurt the rupee in past trading sessions. Besides that, a spike in India's retail price inflation to a six-month high of 6.3% in May, breaching the Reserve Bank of India's target range after five months; while a jump in wholesale prices by 12.94% in May could further dent investor sentiments,'' said Mr Amit Pabari, MD, CR Forex..''However, the only ray of hope to support the rupee is the FII inflows on account of upcoming IPO's and QIP's that could cap sharp losses thereon. Overall, we expect the USDINR pair to form a base near 73.20-30 and rebound sharply above 73.80-74.00 levels in upcoming days,'' added Mr Pabari..On the domestic equity market front, the BSE Sensex ended 221.52 points, or 0.42 per cent higher at 52,773.05, while the broader NSE Nifty climbed 57.40 points or 0.36 per cent to close at 15,869.25..''The market is trading at the highest point of the current up move and we are witnessing mixed reactions in the market. The stock-specific activity is increasing day by day, which is an indication of a "cautiously optimistic" approach from the traders. As the market has closed above the level of 15850/52750, we could see indices breaching the levels of 16050/53300 in the near term... The strategy should be to buy indices only on dips,'' said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities..According to exchange data, the foreign institutional investors were net sellers in the capital market on June 14 as they offloaded shares worth ₹ 503.51 crore. Brent crude futures, the global oil benchmark, rose 0.43 per cent to $73.17 per barrel.

Rupee Declines For 6th Straight Session, Settles Lower To 73.31 Against Dollar

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