Rupee drops 21 paise to 86.61 against US dollar

    Mumbai, Jan 16 (PTI) The rupee depreciated 21 paise to close at 86.61 against the US dollar on Thursday, dragged down by a strong American currency overseas, elevated crude oil prices and foreign fund outflows.
    However, positive domestic equity markets provided support at the lower level, forex traders said.
    At the interbank foreign exchange, the rupee opened at 86.42 and touched the intraday high of 86.37 before ending the session at 86.61 against the greenback, 21 paise lower from the previous close.
    The local unit settled with a gain of 13 paise at 86.40 against the dollar on Wednesday, a day after rebounding 17 paise from its lowest-ever level.
    Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee declined due to increased demand for dollars by importers.
    "Importers may continue to buy dollars, which may further pressurise the rupee. Traders may take cues from retail sales and weekly unemployment claims data from the US. USD-INR spot price is expected to trade in a range of Rs 86.35 to Rs 86.75," he said.
    Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.05 per cent higher at 108.97.
    The rupee's weakness was due to a recovery in the dollar index, which regained strength above 109 levels, coupled with continued volatility in crude prices, Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, said.
    "Concerns over global economic conditions and muted FII flows added to the pressure on the rupee. The trading range for the rupee remains between 86.40 and 86.80 in the near term," he added.
    Brent crude, the global oil benchmark, fell 0.12 per cent but stayed elevated at USD 81.93 per barrel in futures trade.
    Analysts said concerns over geopolitical uncertainties are likely to add volatility in the dollar and crude until the US gets a new administration under President Donald Trump next week.
    In the domestic equity market, the 30-share BSE Sensex climbed 318.74 points, or 0.42 per cent, to settle at 77,042.82 points, while the Nifty rose 98.60 points, or 0.42 per cent, to 23,311.80 points.
    Foreign institutional investors (FIIs) offloaded equities worth Rs 4,341.95 crore on Thursday.

(This story has not been edited by THE WEEK and is auto-generated from PTI)