Rupee settles 14 paise lower at 75.80 against US dollar

The rupee depreciated by 14 paise to 75.80 (provisional) against the US dollar on Wednesday as headwinds due to US-China trade tiff and worries over the second wave of coronavirus infection weighed on investor sentiment.

Forex traders said positive domestic equities supported the local unit, while sustained foreign fund outflows, US-China trade tiff and concerns over coronavirus pandemic weighed on the local unit.

At the interbank foreign exchange, the rupee opened at 75.60, but pared the initial gains to finally close at 75.80, registering a fall of 14 paise over its previous close.

On Tuesday, the rupee had settled at 75.66 against the US dollar.

During the trading session, the domestic unit witnessed heavy volatility and saw an intra-day high of 75.60 and a low of 75.86.

Domestic bourses were trading on a positive note with the benchmark Sensex trading 427.29 points higher at 30,623.46 and broader Nifty rising 149.60 points to 9,028.70.

"The COVID-19 vaccine-trials temporarily excited the market. But there are headwinds due to ongoing US-China trade tiff and worries over second wave of infection. Also, Reliance rights issue has opened today, and we can see some FII participation in it in coming days which may limit the fall in rupee," said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.

Gupta further noted that "technically, The USD/INR spot is trading in a very tight range of 75.25-76, and we expect it to remain in this until there are major cues. Either side breakout will give further clarity over the trend".