Indian rupee drops to 94.04 against US dollar amid dollar strength

Mumbai: The rupee depreciated 33 paise to close at 94.04 (provisional) against the US dollar on Thursday, weighed down by a strong American currency.

Forex traders said the dollar strengthened on a hawkish Fed speech and rising odds of a rate hike in December.

At the interbank foreign exchange market, the rupee opened at 93.73 against the dollar. During intra-day trade, it touched a high of 93.62 and a low of 94.06. The local unit settled at 94.04 (provisional), down 33 paise from its previous close.

On Wednesday, the rupee gained 6 paise to close at 93.71 against the US dollar.

“We expect the rupee to trade with a slight negative bias on the positive tone in the US dollar and elevated US Treasury yields. Rising expectations of two rate hikes by the Fed amid the hawkish tone of Fed speakers also weigh on the rupee,” said Anuj Choudhary, Research Analyst, Mirae Asset Sharekhan.

Choudhary further noted that positive domestic markets and foreign inflows may support the rupee at lower levels.

“Traders may take cues from weekly unemployment claims and building permits data from the US. The USD-INR spot price is expected to trade in a range of 93.70 to 94.20,” he said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 103.03, up 0.12 per cent.

Brent crude, the global oil benchmark, was trading 0.55 per cent lower at USD 92.25 per barrel in futures trade.

On the domestic equity market front, the Sensex advanced 31.61 points to settle at 81,911.01, while the Nifty rose 44.30 points to close at 25,299.35.

Foreign institutional investors (FIIs) purchased equities worth Rs 12,563.33 crore on Wednesday, according to exchange data.