Rupee slips marginally to 71.31 as weak macro data, fall in equities weigh

The rupee on Thursday slipped marginally to close at 71.31 against the US dollar as weak macro-economic data disappointed market participants.

Forex traders said disappointing macro economic numbers and weak domestic equities weighed on the local unit, while easing crude oil prices and weakening of the American currency in the overseas market restricted the fall to some extent.

Government data on Wednesday showed that industrial output contracted by 0.3 per cent in December, while retail inflation jumped to a 68-month high of 7.59 per cent in January on high food prices.

At the interbank foreign exchange market, the rupee opened at 71.35, then lost further ground to touch a low of 71.49.

The domestic unit finally settled at 71.31 against the US dollar, showing a loss of 2 paise over the last close.

"Rupee continued to consolidate in a narrow range but came under pressure after data released on the domestic front was weaker-than-expectation," said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.

Somaiyaa further said, "from the US, market participants will be keeping an eye on inflation number and better-than-expected number could extend gains for the greenback. We expect the USDINR(Spot) to quote in the range of 71.20 and 71.80."