Rupee drops 6 paise to 74.44 against US dollar at start of trade

On Wednesday, the rupee jumped 20 paise to close at 74.38 against the US dollar.

The rupee fell 6 paise to 74.44 against the US dollar when trade opened on Thursday, following the strength of the US currency in the overseas market after hawkish minutes from the US Fed.

Investors saw the Federal Reserve meeting minutes as a sign that the US central bank may raise interest rates faster to calm inflation, which could lead to exits from domestic markets, the U.S. said. Forex traders.

According to the minutes of the Fed’s December 14-15 policy meeting, policymakers believe the U.S. job market is almost healthy enough and ultra-low interest rates are no longer necessary.

In the interbank forex market, the rupee opened at 74.44 against the US dollar, falling 6 paise from the last close. Domestic unit also saw a high of 74.34 in initial trades.

On Wednesday, the rupee jumped 20 paise to close at 74.38 against the US dollar.

Meanwhile, the dollar index, which measures the strength of the greenback against a basket of six currencies, rose 0.02% to 96.19.

The Indian rupee opened flat to slightly weak on Thursday, following the strength of the dollar and the weakness of its Asian and emerging market peers, Reliance Securities said in a research note.

“In addition, a faster than expected rate hike from the US Fed could see exits from domestic markets and could weigh on sentiment,” he added.

Additionally, growing concerns about the Omicron variant of the coronavirus and its impact on the economic recovery as well as firm crude oil prices weighed on the local unit.

Global benchmark Brent crude oil futures fell 1.35% to $ 79.71 per barrel.

On the domestic stock market front, the 30-stock Sensex traded 717.2 points or 1.19% lower to 59,505.95, while the broad NSE Nifty slipped 198.85 points or 1.11% at 17,726.40.

Foreign institutional investors remained net buyers in the capital market on Wednesday as they bought shares worth 336.83 crore, according to exchange data.

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