Rupee falls for third day, settles 23 paise down at 74.55/USD

Rupee has lost 36 paise in the three trading sessions to July 1

The rupee declined by 23 paise to end at 74.55 (provisional) against the U.S. currency on July 1, marking its third straight day of loss amid a lacklustre trend in domestic equities and strengthening of the greenback overseas.

At the interbank foreign exchange market, the rupee opened on a negative note at 74.37 per dollar as against its previous close of 74.32. It hovered in the range of 74.34 to 74.63 per dollar during the day before ending at 74.55.

The domestic currency has lost 36 paise in the three trading sessions to July 1.

"The bearish momentum in the USD/INR pair picked up after weaker PMI numbers and strength in the broad-based dollar index," said Dilip Parmar, Research Analyst, HDFC Securities.

India’s manufacturing sector activities contracted for the first time in 11 months in June as rise in coronavirus cases and strict containment measures adversely impacted demand as well as resulted in job losses, a monthly survey said on July 1.

The seasonally-adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) declined to 48.1 in June from 50.8 in May.

Mr. Parmar said "now the focus will be on Friday’s payroll data which will act as another litmus test for a bullish dollar. At the domestic front, sentiment favours dollar and dip buying is the most preferred trade versus rupee." Spot USD/INR has resistance at 74.87 and support at 73.98 with bias remaining on a bullish side, he noted.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.04% to 92.47.

On the domestic equity market front, the BSE Sensex ended 164.11 points or 0.31% lower at 52,318.60, while the broader NSE Nifty fell 41.50 points or 0.26% to close at 15,680.

Brent crude futures, the global oil benchmark, rose 0.96% to $75.34 per barrel.

Foreign institutional investors were net sellers in the capital market on June 30 as they offloaded shares worth ₹1,646.66 crore, as per exchange data.

Source: Read Full Article