The rupee traded within a narrow range to settle 5 paise higher at 83.23 (provisional) against the US dollar on Thursday, tracking softening crude prices in international markets amid ongoing geopolitical uncertainties. However, foreign fund outflows, a weak dollar abroad and a negative trend in domestic equities weighed on investor sentiment, forex traders said.
At the interbank forex market, the local unit opened at 83.26 against the US currency and witnessed a high of 83.23 and a low of 83.28 during intraday trading.
The local unit settled at 83.23 (provisional), registering a gain of 5 paise over the previous close.
The rupee fell on Thursday under pressure from a weak tone in domestic markets and a rise in the US dollar. FII selling also weighed on the domestic currency, said Anuj Choudhary – research analyst at BNP Paribas’ Sharekhan.
The dollar index, which measures the greenback’s strength against a basket of six currencies, rose 0.05 percent to 106.61.
The global oil benchmark for Brent crude futures fell 1.92 percent to USD 89.74 per barrel.
“We expect the rupee to trade at a slightly negative rate as risk aversion in global markets amid rising geopolitical uncertainty in the Middle East could put pressure on the rupee,” Choudhary said.
However, any diplomatic effort to curb the conflict in the Middle East could support the rupee at lower levels. Traders can rely on weekly unemployment claims and existing US home sales data.
“Investors may remain cautious ahead of US Federal Reserve Chairman Jerome Powell’s speech due to some clues on monetary policy. The spot price of USD/INR is expected to fluctuate between Rs 83 and Rs 83.60,” he said.
In the domestic equity market, Sensex fell 247.78 points or 0.38 percent to settle at 65,629.24 points. The Nifty fell 46.40 points or 0.24 percent to 19,624.70.
Foreign institutional investors (FIIs) were net sellers in the capital markets on Wednesday as they sold shares worth Rs 1,831.84 crore, according to exchange data.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – PTI)