Rupee weakens on strong dollar

Mumbai: The rupee depreciated 21 paise to close at 95.28 against the US dollar, weighed down by a stronger US dollar and surging crude oil prices. Forex traders said the rupee is expected to trade with a slight negative bias on a strong dollar and positive US Treasury yields. Elevated crude oil prices may also pressurise the rupee.

In the interbank foreign exchange market, the rupee opened at 95.01 against the dollar, then lost ground to touch an intra-day low of 95.29 and finally settled for the day at 95.28 (provisional), registering a decline of 21 paise over its previous close. On Tuesday, the rupee appreciated 8 paise to close at 95.07 against the US dollar. "Elevated oil prices remain a source of underlying dollar demand, while foreign investment flows, the global dollar and the RBI's market operations will influence the pace and direction of currency moves," said Anindya Banerjee, Head of Commodity and Currency Research, Kotak NEO. Banerjee further said the Fed remains the immediate common trigger across these markets.

"A firmer-than-expected message on December could support the dollar and yields, putting pressure on precious metals and emerging-market currencies," he said.

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