Rupee fell by 17 paise to reach a low of 83.61 against the dollar.

MUMBAI: The rupee on Tuesday fell 17 paise to close at 83.61 against the US dollar for the second time in four weeks, amid negative equity markets and a stronger greenback against major currencies overseas amid geopolitical tensions.

Forex traders said weak appetite for risky assets and continued foreign capital outflows also dragged down the local unit. At the interbank foreign exchange market, the local unit opened at 83.51 and finally closed at an intraday low of 83.61, registering a loss of 17 paise from its previous close. Earlier, the rupee had closed at the same level on March 22 this year. On Monday, the rupee fell 6 paise to close at 83.44 against the US dollar.

The 10-year US bond yield rose to 4.66 per cent, the highest since November 2023, according to Anuj Chaudhary, research analyst at Sharekhan by BNP Paribas. Weak domestic markets and rising geopolitical tensions also weighed on the rupee. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.02 percent higher at 106.23.

Chaudhry said the US dollar hit a five-month high on a weak yuan, retail sales and safe-haven demand amid Iran-Israel tensions. Global oil benchmark Brent crude futures fell 0.40 per cent to US$89.74 per barrel.

“We expect the rupee to remain weak amid ongoing geopolitical uncertainties which may impact riskier currencies and the US dollar. Rising global crude oil prices and rise in US treasury yields amid expectations of delayed rate cut in the US may also put pressure on the rupee. The market will take cues from Israel’s reaction to Iran’s attack.

“Any further increases would strengthen the dollar, while any signs of de-escalation would lead to some softening. Tradespeople can take cues from building permits; Housing starts and industrial production data from the US. The USD/INR spot price is expected to range between Rs 83.30 and Rs 83.80, Chaudhary said.

On the domestic equity market front, Sensex closed at 72,943.68, down 456.10 points or 0.62 per cent. Nifty fell 124.60 points or 0.56 percent and closed at 22,147.90 points. Foreign institutional investors (FIIs) were net sellers in the capital market on Tuesday as they sold shares worth Rs 4,468.09 crore, according to exchange data.

Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP, said: “…Indian rupee fell to 83.75 due to risk appetite in world markets, US dollar strength and higher US yields as well as US buying by FPIs. Weakening is expected.” Concerns over the dollar and ultimately the Middle East still remain, which will push the rupee towards weakness rather than strength in the coming days.

On the macroeconomic front, wholesale inflation in the country rose marginally to a three-month high of 0.53 per cent in March due to rise in prices of vegetables, potatoes, onions and crude oil from 0.20 per cent in the previous month.

Furthermore, India’s merchandise exports declined marginally to US$ 41.69 billion in March, and 3.11 per cent to US$ 437.06 billion during the last fiscal year, mainly due to geopolitical turmoil and decline in global trade. Is.