The Indian rupee furthered its weakening trend for a third session in a row on Wednesday, edging lower by 4 paise to 68.98 against the US dollar as foreign fund outflows and higher crude oil prices weighed on sentiment.
An unabated sell-off in domestic equities also impacted trading pattern in the forex market.The rupee opened sharply lower at 69.10 but pared most of the the losses during the day and finally settled at 68.98 against the American currency, lower by 4 paise over its previous close at the interbank foreign exchange market.
The domestic currency had settled at 68.94 against the US dollar on Tuesday.
“The rupee opened on a weak note and settled 4 paise down against the US dollar amid sustained foreign fund outflows and rising crude oil prices. Lower domestic equities and mixed Asian currencies against US dollar weighed on rupee,” said V K Sharma, Head-PCG & Capital Market Strategy, HDFC securities.
Forex traders said the rupee is expected to trade in a narrow range ahead of the much crucial European Central Bank (ECB) policy statement to be released on Thursday.
Other major global cues that are going to dictate terms to the rupee include the US second quarter preliminary GDP print on Friday and the Federal Open Market Committee (FOMC) meeting on July 31, traders said.
Brent crude futures, the global oil benchmark, rose 0.25 per cent to $63.99 per barrel.
Foreign investors remained net sellers in the capital markets, offloading shares worth Rs 2,607.97 crore on Tuesday, provisional exchange data showed.