Rupee tumbles 24 paise to 73.76 amid strong dollar, weak equities

Indian rupee, the domestic currency benchmark depreciated 24 paise to 73.76 per dollar on Thursday, tracking muted equities and strengthening US currency.

The local unit opened on a weak note at 73.70 at the interbank forex market, then fell further to 73.76, registering a fall of 24 paise over its last close. On Wednesday, the rupee settled 12 paise higher at 73.52 per dollar.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.32 per cent to 93.51.

Meanwhile, the Federal Reserve concluded its two-day policy meeting on Wednesday. Markets fell globally after the US central bank kept a dovish policy, although hinted to be reluctant in adding stimulus in one of the world's largest economy, hit severely by the pandemic.

Federal reserve continued with its policy shift towards more inflation tolerance, earlier announced in August and said it would keep interest rates ultra-low to support the economy. Overseas, the Bank of Japan and the Bank of England will announce their respective policy decisions on Thursday.

Anuj Gupta - DVP- Commodities and Currencies Research, Angel Broking said, "Federal Reserve pledged to keep interest rates low for a long time but stopped short of offering further on stimulus to shore up a battered U.S. economy and they are also hold interest rates till 2023 with inflation never breaching 2% over the period."

"With no major surprises from the Fed policy and the US dollar broadly stable globally, the rupee should continue to trade the 73-74 range a while longer," said Abhishek Goenka, Founder and CEO, IFA Global.

Goenka further said that "while several inflows are queued up, we expect the RBI to continue accumulating reserves and that should limit downside. The yuan is continuing to strengthen and that should limit USD strength against Asian currencies."As per Geojit Financial Services, For USD INR, 73.83 and 74.05 may act as crucial levels in the upside while 73.48 and 73.25 will act as support levels.

"72.80 on the rupee marks a near-term high for the pair," said, Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking.

On the domestic equity market front,  Sensex and Nifty traded on a negative note on Thursday, on back of weak global equities amid rising concerns about economic recovery from the COVID-19 pandemic. Sensex traded 185 points lower at 39,120 and Nifty fell 65 points to 11,539.  

Foreign portfolio investors (FPIs) bought shares worth Rs 264.66 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 212.21 crore in the Indian equity market on 16 September, provisional data showed.

Oil price fell after rising sharply in the earlier session on back of drawdown in US crude inventories and as Hurricane Sally forced many production units to shut down. Brent Crude futures, the global oil benchmark, fell 1.07% today to USD 41.77 per barrel.

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