Rupee skids for 4th day; settles 6 paise down against dollar

Mumbai: The rupee depreciated by 6 paise to close at 69.04 against the US dollar on Thursday amid sustained foreign fund outflows and firm crude oil prices.

Prolonged weakness in the domestic equity markets and a strengthening greenback further weighed on the local unit, forex traders said.

At the interbank foreign exchange market, the rupee opened at 68.99 and went on to touch the day's high of 68.92 against the US dollar. The local currency, however, failed to sustain the gains and slipped to a low of 69.07, before finally finishing at 69.04, down by 6 paise against its previous close.

This is the fourth straight day of fall for the rupee, during which it has lost 24 paise.

Forex traders attributed the weak trend to unabated foreign fund outflows and soaring crude oil prices.

Besides, they said the rupee is expected to trade in a narrow range ahead of the release of the crucial European Central Bank (ECB) policy statement.

Other major global cues that are going to dictate the trend in the currency market include the US second quarter preliminary GDP print on Friday and the Federal Open Market Committee (FOMC) meeting on July 31, traders said.

Meanwhile, foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 1,393.71 crore on Wednesday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, spurted 1.06 per cent to USD 63.85 per barrel.

The dollar index, which gauges the greenback's strength against a basket of six currencies, inched up 0.08 per cent to 97.80.

Domestic equity indices surrendered early gains to end modestly lower Thursday, extending their loss-making streak to the sixth straight session.

The 30-share BSE Sensex finished at 37,830.98, showing a loss of 16.67 points or 0.04 per cent. The broader NSE Nifty too shed 19.15 points or 0.17 per cent to settle at 11,252.15.

Meanwhile, the 10-year government bond yield was at 6.51 per cent on Thursday.

Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 69.0135 and for rupee/euro at 76.9616. The reference rate for rupee/British pound was fixed at 85.8855 and for rupee/100 Japanese yen at 63.83.

Globally, market participants are looking forward to the US and China trade talks next week.

The US and Chinese officials are restarting negotiations in Shanghai on Tuesday in an effort to resolve the year-long trade dispute.