Mumbai: The rupee tumbled 23 paise to close at 74.06 against the US dollar on Tuesday, as weaker Asian peers and massive sell-offs in domestic equities weighed on investor sentiment.
Besides, rising crude prices also put pressure on the rupee.
At the interbank foreign exchange market, the local currency opened at 73.79 and witnessed an intra-day high of 73.73 and a low of 74.12 against the US dollar in day trade.
The local unit finally settled at 74.06 a dollar, down 23 paise over its previous close.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.26 per cent higher at 93.62.
According to Dilip Parmar, Research Analyst, HDFC Securities the Indian rupee depreciated following global risk-off moods tracking cues from a sharp surge in bond yields ahead of Fed Powell’s testimony.
“The rise in global bond yields is likely to support safe-haven currencies as Powell may flag “upside risks” to inflation in his testimony. Looking ahead, a light data docket awaits, highlighted by the latest US consumer confidence figures, while Fed Chair Powell heads to Capitol Hill,” Parmar said.
Meanwhile, Brent crude futures, the global oil benchmark, advanced 0.89 per cent to USD 80.24 per barrel.
On the domestic equity market front, the BSE Sensex ended 410.28 points or 0.68 per cent lower at 59,667.60, while the broader NSE Nifty declined 106.50 points or 0.6 per cent to 17,748.60.
“The Indian Rupee extended losses for the third straight session on Tuesday against the dollar, following further upside in long-term US Treasury yields and soaring crude oil prices,” said Sriram Iyer, Senior Research Analyst at Reliance Securities.
Emerging market and most Asian currencies also weakened this Tuesday, while weakness in the local equities also rubbed on the local unit.
In the overseas markets, the US Dollar Index rose this afternoon trade in Asia tracking the rising bond yields.