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The rupee consolidated in a narrow range and settled for the day on a flat note, higher by 2 paise at 83.50 (provisional) against the U.S. dollar on May 09, on weak domestic markets and a strong American currency.
Forex traders said massive foreign fund outflows dented investors’ sentiments.
At the interbank foreign exchange market, the local unit traded in a narrow range. It opened at 83.49, and touched an intraday high of 83.44. The local unit finally settled for the day at 83.50 (provisional), higher by 2 paise over its previous close.
On Wednesday, the rupee stayed range-bound and settled 1 paisa lower at 83.52 against the U.S. dollar.
“The Indian rupee traded flat on weak domestic markets and a strong U.S. dollar. The overnight jump in crude oil prices also put pressure on the rupee. However, likely dollar inflows supported the rupee earlier in the day,” said Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 105.70, higher by 0.15%, as the U.S. dollar gained on hawkish Fedspeak and geopolitical tensions in the Middle East.
“We expect the rupee to trade with a slight negative bias amid strength in the U.S. dollar and selling pressure by foreign investors. However, mixed to positive Asian and European markets may support the rupee at lower levels.
“Any intervention by RBI or bond related foreign inflows may support rupee at lower levels. Traders may take cues from weekly unemployment claims data from U.S. and speeches from Fed officials. USD-INR spot price is expected to trade in a range of ₹83.30 to ₹83.75,” Mr. Choudhary said.
Brent crude futures, the global oil benchmark, rose 0.57% to $84.06 per barrel.
On the domestic equity market, the 30-share BSE Sensex fell 1,062.22 points, or 1.45% to close at 72,404.17 points. The broader NSE Nifty settled 345.00 points or 1.55% lower at 21,957.50 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on May 08, as they offloaded shares worth ₹6,669.10 crore, according to exchange data.
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