Rupee Slips 2 Paise To Settle At 88.65 Against US Dollar

 The rupee slipped 2 paise to 88.65 (provisional) against the US dollar on Friday amid a strong American currency against major crosses overseas and rising crude oil prices.

A weak trend in domestic equity markets also weighed on the domestic currency, forex traders said.

At the interbank foreign exchange, the rupee opened at 88.61 and tumbled to the intraday low of 88.72 against the greenback. The unit ended the session at 88.65 (provisional), registering a loss of 2 paise from its previous closing level.

The domestic unit had appreciated 7 paise to close at 88.63 against the dollar on Thursday.

The rupee weakened on risk-off sentiments in the global market and a strong US dollar. Overnight recovery in crude oil prices too pressurised the rupee; however, reports of sale of US dollar by state-run banks cushioned the downside, said Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan.

"We expect the rupee to trade with a slight negative bias on weak global markets amid worries over the weakening US labour market and a strong US dollar. Importer demand may also weigh on the rupee. However, any further intervention by the RBI may support the rupee at lower levels. USD-INR spot price is expected to trade in a range of ₹88.45 to Rs 89," Choudhary said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.14% to 99.72.

Brent crude, the global oil benchmark, was higher by 1.09% at USD 64.07 per barrel in futures trade.

On the domestic equity markets front, the Sensex fell 94.73 points or 0.11 per cent to settle at 83,216.28, while the Nifty dropped 17.40 points or 0.07 per cent to end at 25,492.30.

Foreign institutional investors sold equities worth ₹3,263.21 crore on Thursday, according to exchange data.

A monthly survey released on Thursday showed India's services sector growth witnessed the slowest pace of expansion in five months in October, as competitive pressures and heavy rains in parts of the country led to a slower increase in output.

The seasonally adjusted HSBC India Services PMI Business Activity Index fell from 60.9 in September to 58.9 in October, indicating the slowest pace of expansion since May.