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Rupee declines by 14 paise to 82.47 against US dollar, forex inflows cap fall

Mumbai: The rupee declined by 14 paise to close at 82.47 against the US dollar on Friday as a stronger greenback in the overseas markets weighed on the local unit.

However, a positive trend in domestic equities and fresh foreign fund inflows capped the rupee’s loss, traders said.

At the interbank foreign exchange market, the local currency opened weak at 82.39 and witnessed a high of 82.29 and a low of 82.49. It finally settled at 82.47 against the American currency. The rupee had closer higher at 82.33 against the dollar on Thursday.

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“Indian Rupee consolidated in a narrow range today. The strong dollar index put downside pressure on the rupee. However, positive domestic equities and weak crude oil prices cushioned the downside. FII inflows also supported the rupee at lower levels,” Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas, said.

The US dollar strengthened as US third quarter advance GDP topped estimates. The dollar also gained as Euro declined after ECB hiked interest rates by 75 bps but had a dovish tone in its forward guidance.

Euro also fell amid the slowing GDP of France. However, German GDP was better than estimates, Choudhary added.

“Indian rupee registered its first weekly gains in seven amid a recovery in domestic equities supported by foreign fund inflows and a weaker greenback against major trading currencies,” Dilip Parmar, Research Analyst, HDFC Securities, said.

In the near term, spot USD/INR is expected to consolidate in the range of 82 to 82.80, Parmar added.

“Euro after advancing in the last few sessions witnessed some profit booking at higher levels after ECB raised interest rates for the third meeting in a row. ECB signalled an intention to start mopping up cash from the banking system to fight record-high inflation,” Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services, said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose by 0.25 per cent to 110.86.

Global oil benchmark Brent crude futures fell 0.91 per cent to USD 96.08 per barrel.

On the domestic equity market front, the 30-share BSE Sensex rose 203.01 points or 0.34 per cent to end at 59,959.85, while the broader NSE Nifty advanced 49.85 points or 0.28 per cent to 17,786.80.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets as they bought shares worth Rs 1,568.75 crore on Friday, according to exchange data.

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