During the day, the rupee was seen at a high of 81.72 and a low of 81.85 against the greenback. , Photo Credit: Sudarshan V
The rupee depreciated 3 paise to close at 81.82 (provisional) against the American currency on Friday amid a stronger greenback overseas.
However, forex traders said a strong sentiment in the domestic equity market limited the rupee’s downside.
At the interbank foreign exchange, the domestic unit opened at 81.77 against the dollar and finally settled at 81.82 (provisional), down 3 paise from its previous close.
During the day, the rupee was seen at a high of 81.72 and a low of 81.85 against the greenback.
On Thursday, the rupee had closed at 81.79 against the American currency.
Meanwhile, the dollar index, which measures the strength of the dollar against six currencies, rose 0.51 per cent to 102.02.
Global oil benchmark Brent crude futures rose 0.45 per cent to $78.72 per barrel.
A stronger US dollar and improving crude oil prices weighed on the rupee. However, positive domestic equities and FII inflows capped the fall, said Anuj Chowdhary – Research Analyst at Sharekhan by BNP Paribas.
The US dollar strengthened on strong earnings from IT companies and upbeat US inflation data released on Thursday, raising hopes of the hawkish Federal Open Market Committee (FOMC).
“We expect the rupee to move marginally positive on increased risk appetite in global markets and fresh inflows from foreign investors. However, a stronger US dollar may cap a sharp rally in the rupee,” Mr Choudhary said.
Chowdhary said traders may remain cautious ahead of India’s fiscal deficit and the core PCE deflator from the US, which is the preferred gauge of inflation used by the US Federal Reserve, adding, “We expect the USD/INR Spot will trade between 81.30 to 82.20 in the near future”.
On the domestic equity market front, the 30-share BSE Sensex closed at 61,112.44, up 463.06 points or 0.76 per cent. The broader NSE Nifty rose 149.95 points, or 0.84 per cent, to 18,065.00.
Foreign institutional investors (FIIs) were net buyers in the capital market on Thursday as they bought shares worth Rs 1,652.95 crore, according to exchange data.