The rupee tumbled 23 paise to close at 74.06 against the US dollar on Tuesday amid a lacklustre trend in domestic equities and strengthening of the American currency in the overseas market.
At the interbank foreign exchange market, the local currency opened at 73.79 and witnessed an intra-day high of 73.73 and a low of 74.12 against the US dollar in day trade.
The local unit finally settled at 74.06 a dollar, down 23 paise over its previous close.
On Monday, the rupee had settled at 73.83 against the US dollar.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.26 per cent higher at 93.62.
According to Dilip Parmar, Research Analyst, HDFC Securities the Indian rupee depreciated following global risk-off moods tracking cues from a sharp surge in bond yields ahead of Fed Powell’s testimony.
"The rise in global bond yields is likely to support safe-haven currencies as Powell may flag "upside risks" to inflation in his testimony. Looking ahead, a light data docket awaits, highlighted by the latest US consumer confidence figures, while Fed Chair Powell heads to Capitol Hill,” Parmar said.
Meanwhile, Brent crude futures, the global oil benchmark, advanced 0.89 per cent to USD 80.24 per barrel.
On the domestic equity market front, the BSE Sensex ended 410.28 points or 0.68 per cent lower at 59,667.60, while the broader NSE Nifty declined 106.50 points or 0.6 per cent to 17,748.60.
Foreign institutional investors were net sellers in the capital market on Monday as they offloaded shares worth Rs 594.63 crore, as per exchange data.