Mumbai: The rupee depreciated 18 paise to close at 85.50 (provisional) against the US dollar on Thursday, weighed down by demand for American dollars from importers and foreign fund outflows.
Forex traders the rupee declined on dollar demand. However, a surge in the domestic markets and overnight weakness in crude oil prices cushioned the downside.
At the interbank foreign exchange, the domestic unit opened at 85.53 and moved between an intra-day high of 85.48 and a low of 85.73 against the greenback. The unit ended the session lower at 85.50 (provisional), registering a fall of 18 paise over its previous closing level.
On Wednesday, the rupee pared most of its initial gains and ended the day higher by 4 paise at 85.32 against the American currency.
Over the past two trading sessions, the rupee opened on a bullish note, but pared most of the gains and settled with marginal gains against the greenback. After a firm opening, it rose to near 84.62 on Tuesday and 85.05 on Wednesday, and lost momentum during the trading session.
Going ahead, Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said "we expect the rupee to trade with a positive bias amid positive domestic markets and rise in risk appetite in global markets. Easing geopolitical tensions between India and Pakistan and easing trade tariff tensions between the US and China may also support the rupee".
"Traders may take cues from PPI, retail sales, Empire State manufacturing index, industrial production and weekly unemployment claims data from the US," Choudhary said, adding that USDINR spot price is expected to trade in a range of 85.20 to 85.90.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading lower by 0.28 per cent at 100.75.
Brent crude, the global oil benchmark, fell 3.72 per cent to USD 63.63 per barrel in futures trade.
Forex traders said investors are awaiting cues from US FED Chair Jerome Powell's speech on Thursday. His comments will be closely watched on how the Central Bank plans to proceed with Monetary Policy easing, they said.
The domestic equity market faced heavy volatility on Thursday. The 30-share BSE Sensex after opening on a weak note, recovered the losses and finally settled with gains of 1,200.18 points, or 1.48 per cent, to close at 82,530.74 points.
In tandem, the Nifty opened weak but gained momentum during the day and ended the session on a positive note, up 395.20 points, or 1.60 per cent, at 25,062.10 points.
Foreign institutional investors (FIIs) bought equities worth Rs 931.80 crore on a net basis on Wednesday, according to exchange data.
(Except for the headline, this article has not been edited by FPJ's editorial team and is auto-generated from an agency feed.)
