Mumbai, Feb 10 (PTI) The rupee pared initial losses and settled on a positive note on Tuesday, higher by 10 paise at 90.56 against the US dollar, supported by positive cues from domestic equities and weakening of the American currency in the overseas market.
Forex traders said the rupee is witnessing sideways price action as the support from positive domestic equities and foreign fund inflows was negated by geopolitical tensions and dollar demand from importers.
At the interbank foreign exchange market, the rupee opened at 90.63 against the US dollar, then lost some ground to touch an intraday low of 90.77 and a high of 90.48 against the greenback.
The rupee eventually settled at 90.56, registering a gain of 10 paise over its previous close.
On Monday, the rupee witnessed volatile trading session and settled for the day on a slightly lower note, down 1 paisa at 90.66 against the US dollar.
“We expect the rupee to trade with a slight positive bias on strength in the domestic markets and trade deal optimism. Weak dollar and fresh foreign inflows may further support the rupee.
“However, geopolitical tensions and dollar demand from importers may cap sharp upside. Traders may remain cautious ahead of the non-farm payrolls report on Wednesday. USDINR spot price is expected to trade in a range of 90.30 to 90.80,” Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan, said.
Dilip Parmar, Research Analyst, HDFC Securities, said, “This upward trajectory (in the rupee) is further reinforced by a pivot in investor sentiment, as foreign institutional funds have turned net buyers in domestic equities and bonds this month.” Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.01 per cent higher at 96.82.
The dollar index has fallen below the 97 level amid ongoing weakness and shifting away from dollar assets. The Chinese regulators have urged banks to cut exposure on US Treasury exposure due to US policy risks.
Brent crude, the global oil benchmark, was trading 0.16 per cent lower at USD 68.93 per barrel in futures trade.
On the domestic equity market front, Sensex climbed 208.17 points to settle at 84,273.92, while Nifty was up 67.85 points to 25,935.15.
On Tuesday, foreign institutional investors purchased equities worth Rs 69.45 crore, according to exchange data. PTI DRR TRB
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