Indian rupee depreciated by 4 paise to 73.11 against the US dollar on the first session of the New Year as market participants remained on the sidelines due to lack of fresh cues. Forex traders said the momentum for the currency is likely to stay low as no major economic data is expected to release on the domestic as well as on the global front.
The domestic unit was trading in a narrow range on Friday. It opened at 73.09 against the US dollar at the interbank forex market, and fell to 73.11 against the greenback, down 4 paise over its previous close.
On Thursday, the rupee rose for the sixth straight session and ended 24 paise higher at a nearly four-month high of 73.07 per dollar supported by positive domestic equities and unabated foreign fund inflows.
Meanwhile, the dollar index, rose 0.29 per cent to 89.93 against a basket of six currencies.
Abhishek Goenka, Founder and CEO of IFA Global said,"The US set a daily record for COVID deaths for the second straight day. This weighed on sentiment and helped the Dollar clawback some of the losses, particularly against the Euro. Further, the participation in USD/INR is likely to be thin on Friday."
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 161.84 points higher at 47,913.17, and the broader NSE Nifty was up 43.80 points at 14,025.55.
Foreign portfolio investors (FPIs) bought shares worth Rs 1,135.59 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 257.64 crore in the Indian equity market on 31 December, provisional data showed.
Brent crude futures, the global oil benchmark, advanced 0.33 per cent to USD 51.80 per barrel. Oil price gained even as coronavirus depressed economic activity and pull down demand.