Rs slumps 34 paise to 82.81 against dollar

Mumbai: The rupee pared its initial gains and settled 34 paise lower at 82.81 against the US dollar on Monday, tracking the strength of the American currency in the overseas market.

At the interbank foreign exchange market, the local unit opened at 82.35 and witnessed a high of 82.32 and a low of 82.82.

It finally settled at 82.81 against the American currency, registering a fall of 34 paise over its last close of 82.47.

The Indian rupee depreciated on Monday amid strength in the US dollar. However, positive domestic equities and weak crude oil prices cushioned the downside, said Anuj Choudhary - Research Analyst at Sharekhan by BNP

Paribas.

Moreover, inflows by foreign investors supported the rupee at lower levels.

"We expect the rupee to trade with a negative bias amid strong US dollar amid increasing odds of an aggressive rate hike by the Fed on Wednesday. Some recovery in crude oil prices may also weigh on Rupee," Choudhary added.

Traders may remain cautious ahead of manufacturing PMI and trade deficit data, which is expected to be released on Tuesday, Choudhary said, adding, "We expect USD-INR spot price to trade in the range of 81.80 and 83.30 in the next couple of

sessions."

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.28 per cent to 111.05.

Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services, said the rupee fell as the dollar started to recover from its recent lows.

The Fed is expected to raise rates by another 75 bps and further hawkish statements could extend gains for the greenback.

Pound and Euro recovered last week and the BoE policy statement that will be released this week will be important for these major crosses.

"We expect the USD-INR (Spot) to trade sideways with a positive bias and quote in the range of 82.20 and 82.80," Somaiya added.

According to Dilip Parmar, Research Analyst, HDFC Securities, Chinese yuan and Thai Baht were the worst performers among Asian currencies as investors remain cautious over China's growth, while the rupee remained the median performer amid higher domestic equities.

"However, the Indian rupee erased early morning gains following a rebound in crude oil prices and the dollar index weighed," Parmar said, adding that the rupee clocked the tenth monthly decline against the

US dollar.