Mon. Dec 5th, 2022

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Rupee slips 5 paise on strong dollar, border tensions

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The rupee on Thursday declined 5 paise to 75.77 against the US dollar in the early trade following weakness in the domestic equity market and strengthening American currency.

Concerns over fresh trade tensions between the EU and the US, rising Covid-19 cases and India-China border tension further weighed on sentiment.

The domestic unit opened the day at 75.75 per dollar against the previous close of 75.72. Rupee consolidated in a narrow range of 75.60 and 75.80 on Wednesday.

“We expect that momentum of appreciation could be curbed for the rupee as the RBI could come in to buy dollars at lower levels,” brokerage Motilal Oswal Financial Services said.

On the domestic front, no major economic data is expected to be released but market participants will be awaiting the US final GDP number that will be released in today’s session.

There are hopes that the number could disappoint and that could keep dollar gains in check. Yesterday, US equities witnessed selling pressure as a surge in coronavirus cases in the United States re-ignited fears of a new round of government lockdowns.

“For the day, we expect the USD INR (Spot) could quote in the range of 75.40 and 76.05,” Motilal Oswal Financial Services said.

The pound came under pressure against the US dollar after reports that the United States is reviewing tariffs on European products that could curb global risk appetite. The expectation is that the US is considering tariffs on $3.1 billion of exports from Britain, France, Germany and Spain. The currency extended losses after EU’s chief negotiator said a deal was possible, but Britain needs to give clear signals it is ready to work towards one.

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