Mumbai, Dec 5 (PTI) The rupee recovered from all-time low levels to settle up by 1 paisa at 83.37 against the US dollar in a restricted trade on Tuesday amid a stronger American currency in overseas markets and disappointing services sector data.
Forex traders said the rupee traded in a narrow range as positive domestic markets and crude oil prices trading below the USD 80 per barrel mark cushioned the downside.
At the interbank foreign exchange market, the local unit opened at its all-time low level of 83.41 against the greenback.
The local unit oscillated between an intra-day low of 83.41 and a high of 83.37 against the greenback and finally settled at 83.37 (provisional) against the dollar, higher by 1 paisa from its previous close, even as domestic benchmark indices touched new lifetime peaks.
On Monday, the rupee settled at 83.38 against the US dollar despite domestic benchmark stock indices rallying to lifetime high levels.
“We expect Rupee to trade with a slight negative bias on positive US dollar and weak global markets. However, expectations of fresh foreign fund inflows and a weak tone in crude oil prices may support rupee at lower levels,” said Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas.
Traders may take cues from US ISM services PMI and JOLTS job openings data. Investors may remain cautious ahead of RBI’s monetary policy decision later this week. USDINR spot price is expected to trade in a range of 83.10 to 83.70, Choudhary said.
The Reserve Bank is likely to maintain the status quo on the short-term interest rate in its monetary policy review later this week.
RBI Governor Shaktikanta Das-headed Monetary Policy Committee (MPC) is scheduled to begin its three-day deliberations on December 6. Das would unveil the decision of the six-member MPC on December 8.
“Bargain buying has been seen in the greenback following risk-averse mood after weaker-than-expected US factory orders. Market participants have scaled back some dovish bets on the Fed ahead of key data releases this week,” Dilip Parmar, Research Analyst, HDFC Securities.
The focus will be on US data, a slower-than-expected decline in job openings and resilient ISM figures can push the dollar higher while meeting the estimates could cap the gains.
“Back home, the slower pace of service activities and high dollar demand pushed the rupee slightly lower. However, the pair is expected to continue within the range of 83.20 to 83.50,” Parmar added.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.07 per cent lower at 103.63. Brent crude futures, the global oil benchmark, recovered 0.76 per cent to USD 78.62 per barrel.
On the domestic equity market front, Sensex surged 431.02 points, or 0.63 per cent, to settle at its all-time high of 69,296.14 points. The Nifty advanced 168.30 points, or 0.81 per cent, to hit its lifetime high of 20,855.10 points.
Foreign institutional investors were net buyers in the capital market on Tuesday as they purchased shares worth Rs 5,223.51 crore, according to exchange data.
On the domestic macroeconomic front, the services sector growth in India fell to a one-year low in November on softer expansions in new work intakes and output, despite receding price pressures, a monthly survey said on Tuesday.
The seasonally adjusted S&P Global India Services Business Activity Index fell from 58.4 in October to a one-year low of 56.9 in November. PTI DRR MR MR
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