Mumbai, May 16 (PTI) The rupee appreciated by 6 paise to close at 82.25 against the US dollar on Tuesday, as the American currency retreated from its elevated levels.
Forex traders said significant foreign fund inflows and easing crude oil prices also supported the local unit.
At the interbank foreign exchange market, the local unit opened at 82.22 against the US currency and moved between a high of 82.16 and a low of 82.29 in the day trade.
The local units settled at 82.25, registering a gain of 6 paise over its previous close. On Monday, the rupee closed at 82.31 against the US currency.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.14 per cent to 102.28.
Global oil benchmark Brent crude futures fell 0.29 per cent to USD 75.01 per barrel.
A weaker greenback, strong foreign fund inflows and lower crude oil prices pushed the rupee higher after falling in the last three days, said Dilip Parmar, Research Analyst, HDFC Securities.
The local unit outperforms Asian currencies as the trade deficit narrows to a 21-month low..
Though the rupee outperformed among Asian currencies, the range remained narrow ahead of US debt ceiling talks. It is widely expected to see no compromise created and a continuation of the current uncertainty, making haven assets volatile.
According to Sriram Iyer, Senior Research Analyst at Reliance Securities the Indian rupee gained against the dollar as the greenback eased in Tuesday afternoon session.
Slightly upbeat trade deficit and possible inflows into the domestic markets may have also lent support, Iyer said.
In the overseas markets, the US Dollar Index eased in Tuesday afternoon trade in Asia, ahead of retail sales data in the evening.
The US Dollar index traded in a small range thus providing the rupee minor support after the last three days of a losing streak, said Jateen Trivedi, VP Research Analyst at LKP Securities.
Participants await clarity on the US debt ceiling and release of retail sales & Core retail sales data. US Debt crisis worries have gripped financial sectors which can keep US dollar fall at check and rupee can be impacted by the same on weakening side.
In the near term, spot USDINR has resistance at 82.50 and support at 82.05.
On the domestic equity market front, the 30-share BSE Sensex declined 413.24 points or 0.66 per cent to end at 61,932.47 points, and the broader NSE Nifty fell 112.35 points or 0.61 per cent to 18,286.50 points.
Foreign Institutional Investors (FIIs) were net buyers in the capital market on Tuesday as they purchased shares worth Rs 1,406.86 crore, according to exchange data. PTI DRR MR
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