Rupee declines 47 paise to 75.76 against US dollar in early trade

Snapping its 3-day winning streak, rupee fell 47 paise to close at 75.76 against US dollar on Wednesday, tracking a strong American currency in overseas market and negative trend in domestic equities

Snapping its three-day winning streak, the rupee tanked 47 paise to close at 75.76 (provisional) against the US dollar on Wednesday, tracking a strong American currency in the overseas market and a negative trend in domestic equities.

Forex traders said the expectations of rate hikes by the US Fed to rein in decades-high inflation are keeping the dollar index buoyant, a key headwind for the Indian rupee.

At the interbank foreign exchange market, the rupee opened at 75.50 against the American currency but lost ground and settled at 75.76, down 47 paise from the previous close.

On Tuesday, the rupee had climbed 24 paise to close at 75.29 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.04 per cent higher at 99.51.

Global oil benchmark Brent crude futures jumped 1.55 per cent to USD 108.29 per barrel.

According to Dilip Parmar, Research Analyst, HDFC Securities the rupee snapped its winning streak and was the worst performer among Asian currencies as Fed members spoke about balance-sheet reduction along with rate hikes.

"Hawkish tone from US Fed members pushed risk assets lower while dollar and bond yields surged to multi-month high.

"Ahead of the RBI monetary policy decision, USD/INR is likely to trade in the range of 75.30 to 76," Parmar noted.

On the domestic equity market front, the 30-share Sensex ended 566.09 points or 0.94 per cent lower at 59,610.41, while the broader NSE Nifty plunged 123.70 points or 0.69 per cent to 17,833.70.

Foreign institutional investors remained net buyers in the capital market on Tuesday as they purchased shares worth Rs 374.89 crore, according to stock exchange data.