Rupee plunges by 37 paise against dollar on new Covid-19 variant worries

The rupee on Friday plunged by 37 paise against the US dollar as investors turned cautious in view of massive selloffs in domestic equities and worries over a new variant of COVID-19.

At the interbank foreign exchange market, the local currency opened at 74.60 and witnessed an intra-day high of 74.58 and a low of 74.92 against the US dollar in day trade.

The local unit settled at 74.89 a dollar, down 37 paise over its previous close of 74.52.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.34 per cent down at 96.44.

"Rupee erased all the gains of the month following risk-off moods after worries over a new variant of COVID-19 surges. Month-end dollar demand and unwinding of carry trade in global forex markets also weighed on rupee," Dilip Parmar, Research Analyst, HDFC Securities.

The rupee registered its biggest weekly fall after October 8, and closed at its weakest level since November 2, Parmar said.

A level above 75 will clear the way for 75.68, weakest level of the year, Parmar said, adding that "now, the support has been shifted from 73.80 to 74.30".

Meanwhile, Brent crude futures, the global oil benchmark, declined 5.50 per cent to USD 77.70 per barrel.

On the domestic equity market front, the BSE Sensex ended 1,687.94 points or 2.87 per cent lower at 57,107.15, while the broader NSE Nifty declined 509.80 points or 2.91 per cent to 17,026.45.

Foreign institutional investors were net sellers in the capital market on Thursday as they offloaded shares worth Rs 2,300.65 crore, as per exchange data.