Mumbai, May 23 (PTI) The rupee traded in a narrow range and settled for the day 1 paisa down at 82.85 against the US dollar on Tuesday, amid a muted trend in domestic equities. Forex traders said the strength of the American currency capped sharp gains for the local unit.
At the interbank foreign exchange market, the local unit opened at 82.82 against the US currency and witnessed a high of 82.76 and a low of 82.85 during intra-day trade.
The local unit settled at 82.85, registering a loss of 1 paisa over its previous close. On Monday, the rupee closed at 82.84 against the US currency.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.32 per cent to 103.52.
Global oil benchmark Brent crude futures fell 0.03 per cent to USD 75.97 per barrel.
The rupee traded with a slight positive bias on positive domestic equities and FII inflows. However, positive US dollar capped sharp gains, Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas, said.
The dollar gained on optimism over debt ceiling talks and hawkish statements from US Federal Reserve officials.
“We expect the rupee to trade with a negative bias on risk-off sentiments in global markets amid uncertainty over the debt ceiling talks and a strong dollar. USD-INR pair is expected to trade in between 82.40 to 83.30 in the near-term,” Choudhary said.
“The US Dollar rose towards USD 103.40, WTI Crude prices stayed in range, keeping rupee in a sideways trend for the day. Participants await US debt ceiling update for further direction, till then rupee range is 82.60-82.90,” said Jateen Trivedi, VP Research Analyst at LKP Securities.
According to Dilip Parmar, Research Analyst, HDFC Securities, lower commodity prices and stable domestic equities backed by the dollar inflows supported the local unit.
Forex traders remain reassured for now that the debt ceiling issue will be resolved soon and the June rate hike will be back on the table after Fed members’ comment on Monday, all this favoured the dollar bulls.
The near-term bias remains bullish for the USDINR and a crossing of 83 will lead to a fresh rally, Parmar added..
On the domestic equity market front, the 30-share BSE Sensex advanced 18.11 points or 0.03 per cent to end at 61,981.79 points, and the broader NSE Nifty rose 33.60 points or 0.18 per cent to 18,348.00 points.
Foreign Institutional Investors (FIIs) were net buyers in the capital market on Tuesday as they purchased shares worth Rs 182.51 crore, according to exchange data. PTI DRR MR
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