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Mumbai, Feb. 7 (PTI): The rupee declined by 22 paise to settle at 71.40 against the US dollar on Friday amid selling in domestic equities and strengthening of the American currency overseas.
Forex traders said the rupee traded weak largely owing to strengthening of the US dollar ahead of the non-farm payrolls number scheduled to be released later in the day.
At the interbank foreign exchange market, the local currency opened on a weak note at 71.26.
During the day, the local unit lost further ground and touched a low of 71.49, before finally settling for the day at 71.40 against the US dollar, down 22 paise over its previous close.
The domestic unit had settled at 71.18 on Thursday.
On a weekly basis, the rupee lost 8 paise.
"Rupee traded weak on Friday as dollar scaled high towards 71.35, mainly on back of on weakening risk appetite amid a strong greenback ahead of US non-farm payroll data due later today," said Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.09 per cent to 98.58.
"Volatility for the rupee in the first half of the session remained low but in the latter half the currency started to come under pressure," said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.
Somaiyaa further said on the domestic front, market participants will be keeping an eye on inflation number that will be released next week; expectation is that the inflation could inch higher and that could further weigh on the rupee.
On the domestic market front, the 30-share BSE Sensex fell 164.18 points or 0.40 per cent to 41,141.85. The broader NSE Nifty settled lower by 39.60 points or 0.33 per cent at 12,098.35.
The 10-year Indian government bond yield was at 6.44 per cent.
Meanwhile, the global crude benchmark Brent futures fell 0.15 per cent to trade at USD 54.85 per barrel.
Foreign institutional investors sold equities worth INR 560.36 crore on a net basis on Thursday, according to provisional exchange data.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.2558 and for rupee/euro at 78.3804. The reference rate for rupee/British pound was fixed at 92.5195 and for rupee/100 Japanese yen at 64.82.
Gold prices on Friday rose INR 112 to INR 41,249 per 10 gram in the national capital on rupee depreciation, according to HDFC Securities.
Silver also moved up by INR 94 to INR 47,305 per kg against the previous close of INR 47,211 per kg.
Gold had on Thursday closed at INR 41,137 per 10 gram.
"Spot gold of 24 karat in Delhi witnessed recovery with prices trading up by INR 112 on rupee depreciation. Spot rupee was trading around 15 paise weaker against the dollar during the day," HDFC Securities Senior Analyst (Commodities) Tapan Patel said.
In the opening trade on Friday, the rupee opened on a weak note and declined by 9 paise to 71.27 against the US dollar.
In the international market, gold and silver were trading flat at USD 1,566.7 per ounce and USD 17.79 per ounce, respectively.