Dollar vs Rupee: Rupee continues to fall against the US dollar, closed at 86.62 after falling one paisa.

Mumbai: The rupee on Friday closed one paise lower at 86.62 (provisional) against the US dollar in the interbank and foreign exchange markets. Heavy withdrawal of foreign funds and fall in domestic stock markets affected investors' perception. Forex traders said the strong US currency and higher crude oil prices also weighed on the domestic currency. The rupee opened at 86.60 in the interbank and foreign exchange markets.

It ranged between a high of 86.55 and a low of 86.62 during the session and finally closed at 86.62 (provisional) against the dollar, a paisa lower than its previous close. Earlier on Thursday, the rupee had fallen by 21 paise and closed at 86.61 dollars. The rupee had strengthened by 30 paise in two consecutive sessions on Tuesday and Wednesday.

Why did the rupee weaken?

Anuj Chaudhary, Research Analyst, Mirae Asset Sharekhan said that the rupee weakened due to negative trend in the domestic market and rise in crude oil prices. He said demand from importers could also put pressure on the rupee. However, dollar selling by the Reserve Bank of India (RBI) may support the rupee at lower levels. Traders can take cues from industrial production and housing market data from the US. He estimated that the spot price of dollar-rupee will be between 86.55 to 86.95.

There was a jump in the dollar index

Meanwhile, the index measuring the strength of the dollar against six currencies rose 0.09 percent to 108.91. Global oil benchmark Brent crude rose 0.36 percent to $81.58 per barrel in futures trade. In the domestic stock market, the 30-share BSE Sensex fell 423.49 points and closed at 76,619.33 points. NSE Nifty fell 108.60 points to 23,203.20. Foreign institutional investors (FIIs) sold shares worth Rs 4,341.95 crore on Thursday.

decline in domestic stock market

The three-day rally in the market came to a halt on Friday due to selling in major companies at the domestic level amid a mixed trend in the global markets. BSE Sensex lost 423 points, while Nifty fell 108 points. Analysts said that apart from selling pressure in IT companies, banks and financial stocks, continued withdrawal of foreign funds and rise in crude oil prices in international markets also weakened investor sentiment. In a session full of ups and downs, the 30-share BSE index Sensex fell 423.49 points, or 0.55 percent, to close at 76,619.33. At one time during trading it had fallen by 779.53 points to 76,263.29.

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Similarly, the National Stock Exchange (NSE) index Nifty also fell by 108.60 points or 0.47 percent to 23,203.20. In this trading week, Sensex lost 759.58 points or 0.98 percent while Nifty fell by 228.3 points or 0.97 percent.