Rupee falls 23 paise to close at 88.71 against US dollar

Mumbai: The rupee depreciated 23 paise to close at 88.71 (provisional) against the US dollar on Thursday, on broad strength of the American currency and fading odds of a rate cut by the US Federal Reserve.

Forex traders said the dollar has staged a rally, moving above the 100 level, after the US Federal Reserve minutes indicated that most officials were opposed to a rate cut in December, following the October cut.

At the interbank foreign exchange market, the rupee opened at 88.63, then lost ground, touching an intra-day low of 88.74. It also hit an intra-day high of 88.62 against the US dollar.

The local currency finally settled for the day at 88.71 (provisional) against the greenback, down 23 paise from its previous close.

On Wednesday, the rupee appreciated 12 paise to close at 88.48 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.03 per cent to 100.19.

Brent crude, the global oil benchmark, was trading 0.71 per cent higher at $63.96 per barrel in futures trade.

"We expect the rupee to trade with a slight negative bias on rising dollar and declining odds of a rate cut by the US Federal Reserve in its December Federal Open Market Committee (FOMC) meeting," said Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan.

Experts said dollar demand from importers may pressurise the rupee further. However, a rise in global risk appetite and optimism over India-US trade deals may support the rupee at lower levels.

"We may see the RBI intervening as the rupee inches towards record low levels. Traders may also take cues from the non-farm payrolls report. USD-INR spot price is expected to trade in a range of 88.40 to 89," Choudhary added.

Meanwhile, on the domestic equity market front, the Sensex jumped 446.21 points to settle at 85,632.68, while the Nifty climbed 139.50 points to 26,192.15.

Foreign Institutional Investors bought equities worth Rs 1,580.72 crore on a net basis on Wednesday, according to exchange data.

Commerce and Industry Minister Piyush Goyal on Tuesday said "you will hear good news" on the proposed trade pact between India and the US once the deal is fair, equitable and balanced.

The remarks came days after President Donald Trump stated that the US is "pretty close" to reaching a "fair trade deal" with India, and added that he will lower tariffs imposed on Indian goods at "some point".