The rupee hovered near its all-time low levels but managed to recover 2 paise to close at 88.71 (provisional) against the US dollar on Wednesday, as high US H-1B visa fees and sustained foreign fund outflows kept the domestic unit under pressure.
Forex traders said investors' risk-aversion and trade policy uncertainty was expected to keep the rupee in the lower range while enhanced US tariffs on Indian goods as well as trade policy uncertainty exacerbated the rupee's depreciation.
At the interbank foreign exchange, the currency opened at 88.80 against the US dollar, and finally settled for the day at 88.71 (provisional), registering a recovery of 2 paise over its previous close.
On Tuesday, the rupee depreciated 45 paise to close at a fresh all-time low of 88.73 against the US dollar. It had touched an all-time intraday low of 88.82 against the US dollar.
Also Read: Stock markets decline as foreign fund outflows persist
"We expect the rupee to remain weak on US visa fee hike issue. Weakness in the domestic market and FII outflows may further pressurise the rupee,” opined Anuj Choudhary, Research Analyst, Currency and commodities, Mirae Asset ShareKhan.
"However, weakness in crude oil prices may support the rupee at lower levels. Any intervention by the RBI may also support the rupee. Traders may take cues from new home sale data from the US. USD-INR spot price is expected to trade in a range of 88.40 to 89.25," he added.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.36 per cent higher at 97.61.
Brent crude, the global oil benchmark, was trading 0.61 per cent higher at USD 68.04 per barrel in futures trade.
On the domestic equity market front, Sensex dropped 386.47 points to settle at 81,715.63, while the Nifty declined 112.60 points to 25,056.90.
Foreign Institutional Investors offloaded equities worth ₹3,551.19 crore on Tuesday, according to exchange data.
Meanwhile, news of India’s Commerce and Industry Minister, Piyush Goyal, being in the US to further trade talks brought in some cheer. Goyal is accompanied by senior officials of the ministry, including special secretary and India's chief negotiator Rajesh Agrawal.
This visit comes in the backdrop of recently concluded day-long discussions in New Delhi between US Chief Negotiator Brendan Lynch and Agrawal on the proposed bilateral trade agreement.
Follow us
