The rupee declined by 4 paise to close at 81.72 against the US dollar on Tuesday as rising crude oil prices in the international market weighed on forex market sentiment.
However, a firm trend in domestic equities and a weak American currency overseas capped the losses in the local unit, forex traders said.
At the interbank foreign exchange market, the local unit opened strong at 81.58 but later slipped into negative territory. During the session, it touched an intra-day high of 81.57 and a low of 81.74 against the greenback.
The local unit finally settled at 81.72, registering a decline of 4 paise over its previous close of 81.68.
“The Indian Rupee (SPOT) ended slightly weaker against the US dollar on Tuesday in another quiet session where the local unit traded in a small trading band…Meanwhile, the offshore Chinese yuan gained over 1 per cent amid hopes of a potential easing in China’s strict pandemic restrictions but did not have an impact on the rupee from an intraday perspective,” Sriram Iyer, Senior Research Analyst at Reliance Securities said.
“The fall in the dollar index also had little impact on the markets. On the economic calendar, India’s September-quarter GDP data, due Wednesday, will be watched closely. However, the key trigger could come from the Fed Chair speech on Wednesday night,” Iyer said.
Indian bond yields ended marginally higher on Tuesday as recovery in global crude oil prices weighed on investor sentiment. “This week, market participants will be shifting focus to the preliminary GDP, core PCE index and employment numbers from the US. We expect the USDINR(Spot) to trade sideways and quote in the range of 81.40 and 82.05,” Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services, said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, slipped 0.33 per cent to 106.33.
Global oil benchmark Brent crude futures surged 2.33 per cent to USD 85.13 per barrel.
On the domestic equity market front, the 30-share BSE Sensex advanced 177.04 points or 0.28 per cent to end at a fresh closing peak of 62,681.84, while the broader NSE Nifty gained 59.10 points or 0.32 per cent to record 18,621.85.
Foreign institutional investors (FIIs) were net buyers in the capital markets on Tuesday as they bought shares worth Rs 1,241.57 crore, according to exchange data.
