Mumbai, Feb 13 (PTI) The rupee settled almost flat with a gain of just 2 paise at 86.93 against the US dollar on Thursday as the support from soft American currency and easing crude oil prices overseas was negated by a lacklustre trend in domestic equities.
The Indian rupee was protected by the Reserve Bank of India (RBI) possibly at 86.90, but persistent foreign fund outflows weighed on investor sentiments, forex traders said.
At the interbank foreign exchange, the rupee opened at 86.82, touched a high of 86.77 during intraday trade. However, the unit pared its most gains and touched the day’s low of 86.94 before ending the session at 86.93 against the American currency, higher by just 2 paise from its previous close.
On Wednesday, the domestic unit closed 16 paise lower at 86.95 against the dollar. In the preceding session on Tuesday, the rupee had appreciated 66 paise, logging the maximum single-day gain since March 3, 2023, to close at 86.79 against the greenback.
Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, said the rupee witnessed positive moves as US inflation data came in higher and the dollar lost momentum, which supported the rupee’s appreciation.
“Going forward, rupee movement will depend on further dollar index trends and global risk sentiment, with key support seen near 86 Updating figures, adding comment.60 and resistance around 87.10,” he added.
According to forex traders, the unabated outflow of foreign funds weighed on the Indian currency and capped its recovery even though the greenback weakened after the US data showed higher-than-expected inflation, trimming hopes of a rate cut by the Federal Reserve.
Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee traded flat-to-positive on Thursday amid weak US dollar index and selling pressure from FIIs.
He said the rupee is expected to trade with negative bias amid overall weakness in the domestic equities and underlying strength in the US dollar.
“FII selling may also weigh on the rupee. However, any further intervention by the RBI may support the rupee at lower levels. Traders may take cues from PPI data from the US,” Choudhary said and projected the USD-INR spot price in a range of 86.60 to 87.30.
Meanwhile, the US dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.10 per cent lower at 107.82.
Brent crude, the global oil benchmark, dropped 1.20 per cent to USD 74.28 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex declined 32.11 points, or 0.04 per cent, to settle at 76,138.97, while the Nifty fell 13.85 points, or 0.06 per cent, to 23,031.40 points.
Foreign institutional investors (FIIs) offloaded equities worth Rs 2,789.91 crore on net basis on Thursday, according to exchange data. PTI HVA DRR
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