Rupee Weakens To 75.42 Against Dollar Amid Selloff In Equities

Edited by Sandeep Singh (with inputs from agencies)

14 Jul 2020, 02:46 PM IST

Rupee Vs Dollar: The rupee is down 5.69% against the dollar so far this year

The rupee weakened by 31 paise - 0.41 per cent - to hit the 75.50 mark against the dollar on Tuesday, before trimming some of those losses. The domestic currency moved in a range of 75.28-75.50 against the greenback during the four-hour session, having started the day lower at 75.34 compared to its previous close of 75.1950. Low risk appetite in the financial markets amid a selloff in equities and a firming dollar overseas put pressure on the rupee, say analysts. The rupee shut shop with a loss of 23 paise - or 0.31 per cent - at 75.42 against the US currency. (Also Read: Little Uptick In Rupee Expected Despite Multiple Positives. Here's Why)

At the current level, the rupee has recovered 1.94 per cent from a record low of 76.91 logged in April, but is still down 5.69 per cent against the dollar so far this year, which makes it the worst performing Asian currency.

Domestic stock markets suffered sharp losses on Tuesday on growing concerns about rising COVID-19 cases and fresh lockdowns in some of the hotspots in the country. The S&P BSE Sensex index ended 1.8 per cent lower at 36,033.06, and the broader NSE Nifty 50 index closed down 1.81 per cent at 10,607.35, dragged by losses in banking and auto stocks.

The rupee came under pressure against the US dollar after retail inflation rose following increases for some food and fuel items, said Gaurang Somaiyaa, forex and bullion analyst at Motilal Oswal Financial Services.

Official data on Monday showed consumer inflation - or the rate of increase in retail prices - accelerated to a worse-than-expected 6.09 per cent in June from 5.84 per cent in March, as the government released the headline reading after a gap of two months. Rising food and fuel prices pushed inflation higher.

International crude oil rates fell on Tuesday on worries that new restrictions to stem surging US and Asian coronavirus cases could threaten a recovery in fuel demand just as top producers prepare to increase output from August. Brent crude futures - the global benchmark for crude oil - were last seen trading 1.03 per cent lower at $42.28 per barrel. Brent has hovered near the $42 per barrel mark for a couple of weeks in some recovery from a 21-year low of $15.98 per barrel registered in April.

The dollar index - which gauges the US currency against six major peers - rose as much as 0.25 per cent on Tuesday.