Rupee falls 9 paise to close at 85.73 against U.S. dollar

Dollar gains against most currencies in 2024, rupee weakens, global markets expect low volumes during holidays.

The rupee depreciated 9 paise to close at 85.73 (provisional) against the U.S. dollar on Thursday (January 2, 2025), as strong dollar demand from importers and foreign fund outflows dented investor sentiments.

Forex traders said the dollar gained against most currencies during 2024 and continued to remain on a strong footing this year. Moreover, persistent foreign fund outflows further dented investors' sentiments.

Additionally, global markets are expected to see low volumes as the holiday season is underway in major economies like those in Europe.

t the interbank foreign exchange, the rupee opened on a weak note and witnessed an intra-day low of 85.79 and a high of 85.68 against the American currency. The local unit settled for the day at 85.73 (provisional), registering a fall of 9 paise over its previous close amid a sharp recovery in domestic equities.

On Wednesday (January 1, 2024), the rupee settled flat at 85.64 against the U.S. dollar.

On December 27, the local currency touched its lifetime intra-day low of 85.80 against the greenback.

"We expect the rupee to trade with a negative bias on strength in the US Dollar and dollar demand from importers. Sustained FII outflows may further pressure the rupee," said Anuj Choudhary — Research Analyst at Mirae Asset Sharekhan.