Rupee slips 13 paise to 73.41 amid rising dollar, muted equities

The Indian rupee fell by 13 paise to open at 73.41 per US dollar on Tuesday tracking strengthening American currency and muted trend in domestic equities.

The Indian currency opened at 73.41 against the US dollar at the interbank forex market, down 13 paise over its previous close. Forex traders said investors are cautious following muted domestic macro-economic data.

On Monday, Indian Rupee snapped its three-session winning run and ended at 73.28, down 12 paise against its previous close of 73.16.

Rising food prices pushed retail inflation to an eight-month high of 7.34 per cent in September, above the RBI's comfort level, while industrial output continued to contract in August, official data showed on Monday.

The decline in the Index of Industrial Production (IIP) was 10.8 per cent in July. The contraction in August stood at 8 per cent. India's CPI edged higher to 7.34% in Sep against 6.69% in Aug, as per the latest data.

"The August industrial production missed estimates, coming in at (-) 8 per cent year-on-year (expected - 7.8 per cent). Given that the Reserve Bank is prioritising growth over inflation, the markets may read more into the IIP data than the CPI data," said Abhishek Goenka, Founder and CEO, IFA Global.

"We expect the USD-INR to spend a few more sessions in the 72.90-73.90 range," Goenka added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, surged 0.10 per cent to 93.16. US dollar was mostly unchanged as the focus changed towards US stimulus package.

U.S. Senate Republicans said they will go along with what President Donald Trump wants in coronavirus relief legislation, a White House spokeswoman reportedly said on Monday.

On the domestic equity market front, domestic market indices turned bullish after opening muted on Tuesday, tracking positive cues from global equities. Extending gains for the ninth consecutive day, Sensex gained 40 points to 40,632 and Nifty rose by 11 points to 11,942.

Foreign portfolio investors (FPIs) bought shares worth Rs 615.17 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 1,028.77 crore in the Indian equity market on 12 October, provisional data showed.

Brent crude futures, the global oil benchmark, rose 0.17 per cent to USD 41.79 per barrel.

Worldwide, there were 380 lakh confirmed cases and 10.85 lakh deaths from COVID-19 outbreak. India's COVID-19 caseload breached the 71-lakh mark and the death toll from COVID-19 infections rose to 10.9 lakh, as of today.

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