Rupee snaps 4-day winning streak, drops 8 paise against US dollar

The rupee snapped its four-session winning run to close 8 paise lower at 73.08 against the US dollar on Wednesday as muted domestic equities and a strengthening greenback overseas weighed on the market sentiment.

At the interbank forex market, the local unit opened at 73.05 against the American currency and witnessed an intra-day high of 72.92 and a low of 73.50.

It finally ended at 73.08, registering a fall of 8 paise over its previous closing. On Tuesday, the rupee had settled at 73.00 against the American currency.

"Rupee pulled back from two-and-a-half-month high on back of short covering along with weaker Asian currencies. Rebound in dollar index also weighed on rupee along with dollar buying around 73 odd levels," said Dilip Parmar, Research Analyst, HDFC Securities.

Medium-term bias for rupee remains on bullish side while near-term bargain buying or profit booking can't be ruled out after surging 1.7 per cent in just four trading sessions, Parmar said, adding that Spot USDINR is having resistance at 73.65 and support at 72.75.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.03 per cent higher at 92.65.

Brent crude futures, the global oil benchmark, rose 0.43 per cent to USD 71.94 per barrel.

On the domestic equity market front, the BSE Sensex ended 214.18 points or 0.37 per cent lower at 57,338.21, while the broader NSE Nifty declined 55.95 points or 0.33 per cent to 17,076.25.

Foreign institutional investors were net buyers in the capital market on Tuesday as they purchased shares worth Rs 3,881.16 crore, as per exchange data.

Meanwhile, India's economic growth surged by a record 20.1 per cent in the April-June quarter of this fiscal, helped by a low base of the year-ago period, despite a devastating second wave of COVID-19.