Mumbai, Aug 27 (PTI) The rupee depreciated by 6 paise to close at 83.93 against the American currency on Tuesday, on overnight jump in crude oil prices and a surge in commodity prices.
However, positive domestic markets and a soft US dollar cushioned the downside, forex traders said.
At the interbank foreign exchange market, the local unit opened at 83.91 and touched an intra-day low of 83.95 against the US dollar.
The domestic currency finally settled at 83.93, lower by 6 paise from its previous close.
On Monday, the Indian rupee settled for the day 3 paise higher at 83.87 against the American currency.
“We expect the rupee to trade with a slight positive bias on rise in global risk sentiments amid dovish Fed speak and rising expectations of a rate cut by the Fed in September.
“However, geopolitical tensions in the Middle East and rising crude oil prices may cap sharp upside. Traders may take cues from US consumer confidence data,” Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said.
Forex traders said the rupee is likely to remain within a narrow range as the Reserve Bank of India has been actively intervening in the market, consistently absorbing inflows.
“The Indian rupee was in a small range of 83.91 and 83.95 as the RBI kept a control over USDINR by selling USD while there were good buyers as rupee stayed near to 83.94 for the entire day. The rupee is expected in a range of 83.80 to 84.00 tomorrow as markets await the US GDP and PCE price index,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.05 per cent lower at 100.79.
Brent crude, the global oil benchmark, declined 0.87 per cent to USD 80.72 per barrel.
On the domestic equity market front, Sensex rose 13.65 points, or 0.02 per cent, to close at 81,711.76 points. The Nifty closed 7.15 points, or 0.03 per cent, up at 25,017.75 points.
“Asian shares moved up as Nikkie closed up by 0.72 per cent while Hang Seng closed up by 0.43 per cent and China closed flat. DAX and CAC were up while Indian shares closed flat. Asian currencies also weakened due to profit taking and China trade jitters,” Bhansali said.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Tuesday, purchasing shares worth Rs 1,503.76 crore, according to exchange data. PTI DRR TRB TRB
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