Rupee slumps 33 paise to close at 74.58 against US dollar

Continuing its fall for the third consecutive session, the rupee on Tuesday slumped 33 paise to close at 74.58 (provisional) against the US dollar as strong American currency and elevated crude oil prices continue to weigh on investor sentiments.

Forex traders said muted domestic equities and dollar buying by banks on behalf of importers also dragged the local unit down.

At the interbank foreign exchange market, the local currency opened at 74.36 against the American currency and witnessed an intra-day low of 74.60 during the session.

The rupee finally settled at 74.58, down 33 paise over its previous close of 74.25 against the greenback.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.09 per cent up at 95.34.

"Higher crude oil prices and risk-off sentiments following a surge in bond yields are enough for the rupee to become the worst-performing currency among Asian currencies," said Dilip Parmar, Research Analyst, HDFC Securities.

Parmar added that "strong dollar demands have been seen from oil importers after Brent crude oil prices started quoting above USD 87 a barrel on the back of supply worries".

"Going ahead, the pullback rally in USD/INR may continue for a few more days as sentiments turn favourable. Spot USD/INR has crossed and sustained above the near-term hurdle of 74.50, the 100 days simple average, has now opened the way for 75 levels while support has been shifted to 74.25," he said.

Meanwhile, Brent crude futures, the global oil benchmark, jumped 0.99 per cent to USD 87.34 per barrel.

On the domestic equity market front, the BSE Sensex ended 554.05 points or 0.90 per cent lower at 60,754.86, while the broader NSE Nifty declined 195.05 points or 1.07 per cent to 18,113.05.

Foreign institutional investors remained net sellers in the capital market on Monday, as they offloaded shares worth Rs 855.47 crore, as per exchange data.