The rupee dropped 4 paise to trade at 83.41 against the US dollar in early trade on Tuesday, tracking higher demand for the American currency from importers. The local currency opened at 83.38 a dollar as compared to previous close of 83.37.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.09% lower at 103.62.
Forex traders said investors are awaiting cues from the Reserve Bank of India’s monetary policy outcome. The Monetary Policy Committee of the central bank will begin its bi-monthly review meeting on Wednesday and announce the decision on Friday.
On Monday, the rupee settled at 83.38 against the US dollar, even as domestic benchmark equity indices ended at record closing high levels.
“Volatility is expected to remain elevated ahead of important economic numbers that will be released from the US. On the domestic front, focus will be on the RBI policy statement; expectation is that the central bank could keep rates on hold and any dovish comments could trigger a fall in the rupee,” said Gaurang Somaiya, forex and bullion analyst, Motilal Oswal Financial Services.
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“Today, focus will be on the services PMI number and better-than-expected data could extend gains for the greenback. We expect the USD-INR (Spot) to trade sideways and quote in the range of 83.20 and 83.50,” Somaiya added.
Meanwhile, Brent crude futures, the global oil benchmark, slipped 0.03% to $78.01 per barrel.
On the domestic equity market front, Sensex jumped 416.59 points, or 0.60%, to 69,281.71, while the Nifty 50 rallied 131.95 points, or 0.64%, to 20,818.75
Foreign institutional investors were net buyers in the capital market on Monday as they purchased shares worth ₹2,073.21 crore, according to exchange data.
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(With inputs from PTI)
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Updated: 05 Dec 2023, 10:23 AM IST