Indian rupee depreciated 13 paise to 73.51 against the US dollar on Tuesday tracking muted domestic equities and fund outflows
The domestic unit opened on a weak note at 73.50 at the interbank forex market, then fell further to 73.51, registering a fall of 13 paise over its last close.
The rupee strengthened by 7 paise to settle at 73.38 against the US dollar on Monday.
"Most of the Asian currencies have started marginally weak this Monday and could weigh on sentiments. Markets could also track weakness in the equities. Most Asian equities have started on a negative note on global risk aversion," Reliance Securities said in a research note.
US dollar gave up some of its gains and fell today as the focus turned towards Central bank Chairman's testimony. US FOMC Chair will testify today before House of Representatives. Commodity traders said investors awaited developments on the US fiscal stimulus by the Federal Reserve policymakers in the US. The dollar index fell 0.14 per cent to 93.52 against a basket of six currencies.
Domestic indices too fell for the fourth straight day, amid fears about the potential worsening of the coronavirus pandemic. The 30-share BSE benchmark Sensex was trading 290.04 points lower at 37,744.10 and broader NSE Nifty slipped 95.10 points to 11,155.45.
Foreign portfolio investors (FPIs) sold shares worth Rs 539.81 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 517.95 crore in the Indian equity market on 21 September, provisional data showed.
Brent crude futures, the global oil benchmark, rose 0.46 per cent to USD 41.63 per barrel. Crude oil prices shot down on possible return of Libyan output and expectation of weak fuel demand recovery due to rising pandemic cases. However, a potential supply disruption in US Gulf of Mexico due to nearing tropical storm supported the sentiments. Both WTI and Brent slipped more than 2% yesterday.
Investors were spooked amid a resurgence in COVID-19 infections across the world and European cities announcing new restrictions to curb the pandemic from spreading.
Worldwide, there were 314 lakh confirmed cases and 9.69 lakh deaths from COVID-19 outbreak. Meanwhile, India's death toll from COVID-19 infections rose to 0.88 lakh and total coronavirus cases stood at 55.62 lakh as of Tuesday.