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Rupee Drops 19 Paise To 79.71 Against US Dollar

The domestic unit finally settled at 79.71, down 19 paise over its previous close of 79.52

Rupee Drops 19 Paise To 79.71 Against US Dollar
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The rupee declined by 19 paise to close at 79.71 against the US dollar on Thursday, weighed down by a firm American currency and a negative trend in domestic equities.

At the interbank foreign exchange market, the domestic currency opened at 79.53 per dollar. It hovered in a range of 79.44 to 79.73 during the session.

The domestic unit finally settled at 79.71, down 19 paise over its previous close of 79.52.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.09 per cent lower at 109.56.

"The Indian rupee weakened against the dollar on Thursday weighed by strong dollar demand from oil companies," said Sriram Iyer, Senior Research Analyst at Reliance Securities.

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Asian and emerging market peers were weak with the Chinese Yuan, Thai Baht and the Taiwanese Dollar amongst the worst performers in afternoon trade.

In the overseas markets, the dollar index pushed higher in early European trade, with buyers returning ahead of the next week’s Federal Reserve meeting.

Ahead of the Fed meeting, traders will also be watching US retail sales and industrial production data due later in the day.

India's 10-year benchmark bond yield rose on Thursday, as market participants are slowly pricing in an aggressive rate hike from the Reserve Bank of India to curb inflation.

According to Dilip Parmar, Research Analyst, HDFC Securities, the Indian rupee drifted further lower following a weaker Chinese Yuan and foreign fund selling amid risk-averse sentiments.

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The dollar has been stabilising versus the major currencies but strengthening against the Asian currencies. The Fed has remained quite hawkish in recent commentaries which are offering a good floor to the dollar.

In the near term, spot USDINR is likely to trade in the range of 79.90 to 79.30. 

Brent crude futures, the global oil benchmark, fell by 0.96 per cent to USD 93.20 per barrel.

On the domestic equity market front, the BSE Sensex ended 412.96 points or 0.68 per cent lower at 59,934.01, while the broader NSE Nifty declined 126.35 points or 0.7 per cent to 17,877.40.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets, as they offloaded shares worth Rs 1,397.51 crore on Wednesday, according to provisional data.

On the macroeconomic front, India's exports rose marginally by 1.62 per cent to USD 33.92 billion, while the trade deficit more than doubled to USD 27.98 billion in August due to increased crude oil imports, the commerce ministry data showed on Wednesday.

The revised data showed that imports rose by 37.28 per cent to USD 61.9 billion in August this year.

Fitch Ratings on Thursday slashed India's GDP growth projection for FY23 to 7 per cent, saying the economy is expected to slow down against the backdrop of global economy, elevated inflation and high interest rate. 

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