The rupee depreciated 9 paise to close at 89.96 (provisional) against the US dollar on Wednesday, tracking a negative trend in domestic equities and sustained foreign fund outflows.
Forex traders said investors are in a wait-and-watch mode, awaiting clarity from the US Federal Reserve before taking decisive positions.
Investors are also awaiting cues from the US-India trade talks, which could boost the rupee in the coming days.
At the interbank foreign exchange market, the rupee opened at 90.00, then fell to an intra-day low of 90.10 against the US dollar and finally settled for the day at 89.96 (provisional), down 9 paise from its previous close.
On Tuesday, the rupee settled up 18 paise at 89.87 against the US dollar.
“We expect the rupee to trade with a negative bias on weak domestic markets and FII outflows, which continue to pressurise the rupee. Delay in trade deal between India and US may further dent the rupee,” Anuj Choudhary, Research analyst, Mirae Asset ShareKhan, said.
Commerce and Industry Minister Piyush Goyal on Wednesday said talks with the US on the proposed bilateral trade agreement are progressing.
“Talks are continuously progressing with them. We are moving forward towards a bilateral trade agreement,” he said.
A delegation led by Deputy US Trade Representative (USTR) Rick Switzer is in the national capital for two-day trade talks with his Indian counterpart Rajesh Agrawal.
The US’ chief negotiator for the pact, Assistant US Trade Representative for South and Central Asia Brendan Lynch, will hold discussions with India’s chief negotiator and Joint Secretary in the Department of Commerce, Darpan Jain.
Choudhary further noted that a weak tone in crude oil prices and a decline in the US dollar may support the rupee at lower levels. Investors may remain cautious ahead of the FOMC meeting decision. USDINR spot price is expected to trade in a range of 89.70 to 90.30.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.09 per cent lower at 99.12.
Brent crude, the global oil benchmark, was trading 0.26 per cent higher at USD 62.10 per barrel in futures trade.
On the domestic equity market front, the Sensex dropped 275.01 points to settle at 84,391.27, while the Nifty fell 81.65 points to 25,758.
Foreign Institutional Investors sold equities worth Rs 3,760.08 crore on Tuesday, according to exchange data.
(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)
