The Indian rupee fell for a second straight day on Friday, depreciating 8 paise to close at 94.20 (provisional) against the US dollar, as a stronger greenback and weak domestic equities kept the currency under pressure, PTI reported from Mumbai.

Source: PTI

Forex traders said the dollar strengthened after stronger-than-expected US inflation data, rising US Treasury yields and hawkish remarks from Federal Reserve officials reinforced expectations of further monetary tightening in the United States.

The fall extended Thursday's 41-paise drop to 94.12, which snapped the rupee's recent appreciation streak as aggressive dollar buying, rising crude oil prices and a reversal in domestic equities erased the currency's early gains, Moneycontrol reported.

Source: Moneycontrol via TradingView

Analysts quoted by PTI said rising US yields could keep the rupee under pressure by making US assets more attractive. Amit Pabari of CR Forex Advisors noted that markets are now pricing in an 85 per cent probability of a December Fed rate hike, while the US two-year Treasury yield surged 13.96 basis points to 4.867 per cent and the 10-year yield climbed 12.39 basis points to 5.113 per cent.

Brent crude, the global oil benchmark, was trading 0.37 per cent lower at $95.47 per barrel in futures trade, offering limited relief to the oil-importing economy. On the domestic front, the Sensex closed 318.56 points lower at 81,592.45 on Friday as the October retail inflation reading of 6.09 per cent — above the RBI's 6 per cent upper tolerance limit — weighed on sentiment.