Mumbai, Aug 7 : The rupee traded in a narrow range and depreciated 6 paise to 95.28 against the US dollar in early trade on Friday, tracking a firmer dollar and a rise in US treasury yields.
Forex traders said dollar demand from importers and profit-taking after the rupee’s recent appreciation appear to have outweighed the favourable global backdrop.
At the interbank foreign exchange market, the rupee opened at 95.27, then touched 95.28 against the American currency, registering a fall of 6 paise from its previous close.
On Thursday, the rupee depreciated 14 paise to close at 95.22 against the US dollar.
“With oil back near USD 83, the dollar firm near 100, and US yields elevated, 95.00-95.10 stands out as a solid support for the rupee, and the currency climbing back towards the 96.00-96.20 zone looks like reality. Global developments, particularly around oil prices and the dollar, are likely to remain the key drivers for the rupee in the near term, keeping the overall bias tilted towards weakness,” said CR Forex Advisors MD Amit Pabari.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.02 per cent higher at 99.95. Brent crude, the global oil benchmark, was trading 1.20 per cent higher at USD 83.48 per barrel in futures trade.
“The rise in US Treasury yields and renewed geopolitical concerns around the Strait of Hormuz are providing some support to the dollar,” said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP. On the domestic equity market front, Sensex declined 235.36 points to 78,699.80 in early trade, while the Nifty fell 24.30 points to 24,608.25.
Foreign institutional investors offloaded equities worth Rs 17.86 crore on a net basis on Thursday, according to exchange data.
