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Rupee firms up gains to end at 76.06 against dollar on Friday

The rupee pared its initial losses to settle marginally higher by 3 paise at 76.06 against the US dollar on Friday, even as concerns over foreign fund outflows and rising crude oil prices weighed on overall sentiment.

The local unit, however, recorded its fourth weekly decline amid growing concerns over the Omicron variant of coronavirus. Firming up of crude oil prices too weighed on the local unit.

At the interbank foreign exchange market, the rupee opened lower at 76.23 a dollar, registering a decline of 14 paise from the last close. During the day, it pared its losses and settled at 76.06 (provisional) against the American currency.

On a weekly basis, the rupee depreciated 28 paise against the US dollar.

Meanwhile, the US dollar index, which measures the greenback’s strength against the basket of six currencies, fell 0.08 per cent to 95.96.

“Indian rupee stabilised today after hitting lowest level of 20 months this week, but recorded fourth weekly decline to close at 76.09 a dollar amid risk averse sentiments, policy divergence, foreign fund outflows and higher trade deficit number,” said Dilip Parmar- Research Analyst, HDFC Securities.

The Reserve Bank of India’s policy divergence with the US Fed remains sizeable, which weighed on the local unit along with higher imports, Parmar said.

Going ahead, trading volumes are set to decline as forex markets head into the Christmas break. “As major events of the year are almost done, we expect forex markets to stay calm in the coming week,” he added.

According to Emkay Global Financial Services, “as we proceed towards the year-end USD/INR spot will be sluggish in between a broad range. Also next week, there is no major data or event to focus on, so Omicron will likely be the key catalyst for forex market”.

Brent crude futures, the global oil benchmark, fell 1.45 per cent to USD 73.93 per barrel.

Foreign institutional investors remained net sellers in the capital market on Friday, as they offloaded shares worth Rs 2,069.90 crore, as per exchange data.

On the domestic equity market front, the BSE Sensex ended 889.40 points or 1.54 per cent lower at 57,011.74, while the broader NSE Nifty declined 263.20 points or 1.53 per cent to 16,985.20.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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