Mumbai, Aug 3 (SocialNews.XYZ) The rupee, after registering gains for four straight sessions, depreciated sharply on Wednesday, due to weak macroeconomic data and rise in the dollar index.
At the interbank foreign exchange market, the rupee ended 45 paise lower at 79.16 against the US dollar, as compared to 78.71 close on the previous trading session.
"Rupee traded very weak near 79.25 - a fall of more than 0.50 points as the dollar index rose above 106$ on back of US China geopolitical issues with regards to Taiwan. Also India's trade deficit widened to an all time high, sending signals on imbalance of trade, guiding rupee weaker to the dollar," said Jateen Trivedi, VP Research Analyst at LKP Securities.
The dollar index gauges the dollar's strength against a basket of 6 currencies was at 106.19. Meanwhile, Brent crude futures fell 0.05 per cent to $99.58 per barrel.
India's exports dipped for the first time in 17 months in July and trade deficit rose sharply to a record $31 billion, fuelled by over a 70 per cent rise in crude oil imports.
"Hawkish comments from Fed members and strength in the US Dollar Index pushed the pair higher. We suspect the RBI may have intervened to replenish its reserves. At the same time, much of the long liquidation is behind us and hence market gravitated towards a balanced state," said Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd.
"Over the near term, we could see USDINR trade within a broad range of 78.75 and 79.50 on spot, with an upward bias. Key risks are US-China tensions over Taiwan," Banerjee added.
Source: IANS
About Gopi
Gopi Adusumilli is a Programmer. He is the editor of SocialNews.XYZ and President of AGK Fire Inc.
He enjoys designing websites, developing mobile applications and publishing news articles on current events from various authenticated news sources.
When it comes to writing he likes to write about current world politics and Indian Movies. His future plans include developing SocialNews.XYZ into a News website that has no bias or judgment towards any.
He can be reached at gopi@socialnews.xyz