The rupee rose 1 paisa in a range-bound trade to close at 83.11 (provisional) against the US dollar on Thursday, as the support from weak American currency overseas was negated by rising crude oil prices. Forex traders said the rupee is trading in a narrow range as muted domestic equities and sustained foreign fund outflows dented investor sentiments.
At the interbank foreign exchange market, the local unit opened at 83.13 against the greenback. The unit oscillated between an intraday low of 83.14 and a high of 83.08 and finally settled at 83.11 (provisional) against the dollar, 1 paisa higher from its previous close.
On Wednesday, the rupee had settled at 83.12 against the US dollar.
The rupee traded on a flat note amid weak domestic markets and rising crude oil prices. Foreign fund outflows also weighed on the domestic currency, said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
However, the American currency was trading on a muted note, as traders pared their positions ahead of US Q4-2023 GDP data capped sharp gains.
“We expect the rupee to trade with a slight negative bias on weak domestic markets and geopolitical tensions in the Middle East. The Red Sea issue, rising crude oil prices, and selling pressure from foreign investors may also dent the rupee.
“Traders may remain cautious ahead of GDP, weekly unemployment claims, durable goods orders and new home sales data from the US. Investors may also watch out for ECB monetary policy decisions. USD/INR spot price is expected to trade in a range of INR 82.90 to INR 83.50,” Choudhary added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.06% lower at 103.17 on Wednesday.
Brent crude futures, the global oil benchmark, surged 1.32% to USD 81.10 per barrel.
On the domestic equity market front, Sensex declined 359.64 points, or 0.51%, to 70,700.67 points. The Nifty fell 101.35 points, or 0.47%, to 21,352.60 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday as they offloaded shares worth INR 6,934.93 crore, according to exchange data.
