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Rupee falls 21 paise to 73.13 amid strong US dollar, weak equities

BusinessToday.In     January 28, 2021
The rupee depreciated by 21 paise to 73.13 per US dollar on Thursday's opening trade tracking muted opening in domestic equities and strengthening American currency.

The domestic unit opened at 73.13 at the interbank forex market, falling 21 paise over its previous close. On Wednesday, Indian rupee rose for the sixth straight day to end 2 paise higher at 72.92 per dollar, despite heavy selling in the domestic equity market. Meanwhile, the dollar index rose 0.12 per cent to 90.75 against a basket of six currencies.

Reliance Securities said in a research note,"The US Dollar Index has started higher this Thursday morning in Asian trade amid safe haven appeal for the greenback amid weakening risk appetite. Asian currencies were weak against the greenback and could weigh on sentiments. Markets will look to cues from US GDP data and a weaker than expected numbers will push more investors towards the US dollar and vice versa."

The US Federal Reserve has decided to stick to its dovish stance and left key overnight interest rate near zero to maintain monetary support until there is a stronger rebound from the pandemic-triggered recession.

On the domestic equity market front, market indices continued falling sharply for the fifth consecutive session on Thursday, the derivatives expiry day, amid weak global equities. Sensex traded 350 points lower at 47,070 and Nifty fell by 105 points to 13,860.

Foreign portfolio investors (FPIs) sold shares worth Rs 1,688.22 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 3.38 crore in the Indian equity market on 27 January, provisional data showed.

Traders said continued FII selling for the third session in the domestic equity market further dragged down rupee below 73.00 levels.

Kshitij Purohit, Product Manager, Currency & Commodities at CapitalVia Global Research said," All major currency like Singapore dollar, Japanese Yen, Australian dollar traded in loss against the US dollar this morning due to rise is dollar index. Technically, USDINR pair closed negative against the US Dollar and investor looking for US GDP data tonight, USDINR spot is trading above psychological level of  73.00 preceding 21-day SMA is currently around 73.10, and above this it may continue bullish momentum will continue for the day. USDINR Feb future will trade in the range of 73.25- 73.60 levels."

Brent crude futures, the global oil benchmark, fell 0.61 per cent to USD 55.47 per barrel. Oil price saw respite as fall in US crude inventories helped overcome concerns regarding fuel demand. Crude inventories dropped by around 10mln barrels last week.

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