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The rupee consolidated in a narrow range and closed 6 paise lower at 81.88 (provisional) against the US currency on Tuesday (April 2), as investors preferred to remain on edge ahead of the US Fed meeting outcome.
At the interbank foreign exchange, the local unit opened on a positive note at 81.75 but settled 6 paise lower at 81.88 against the US dollar despite a firm trend in domestic equities.
The rupee touched a high of 81.72 and a low of 81.95 against the American currency during the day.
On Friday, the rupee had closed at 81.82 against the American currency.
Forex and equity markets were closed on Monday on account of ‘Maharashtra Day’.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.15% to 102.30.
Global oil benchmark Brent crude futures fell 0.55% to $78.87 a barrel.
Forex traders said investors are awaiting cues from the US FOMC meeting scheduled to begin later in the day. The market now awaits the outcome of the Federal Open Market Committee (FOMC) on May 3.
Dilip Parmar, Research Analyst, HDFC Securities, said that traders and hedgers bet on the dollar ahead of the FOMC’s policy decision yesterday, which kept the rupee weak throughout the day.
“Spot USD/INR is expected to take support at 81.50, 200-day simple moving average and resistance at 82.30. We are expecting a short covering rally in the near term before breaking the long term support line,” said Mr. Parmar . ,
This week will be a short holiday as the market is open for only three trading sessions.
In the domestic equity market, the 30-share BSE Sensex advanced 242.27 points or 0.40% to close at 61,354.71. The broader NSE Nifty settled 82.65 points or 0.46% higher at 18,147.65.
Foreign institutional investors (FIIs) were net buyers in the capital market on Friday as they bought shares worth ₹3,304.32 crore, according to exchange data.
On the domestic macroeconomic front, record GST collections and four-month high Manufacturing PMI are supporting the bullish sentiments.
GST collection in April grew 12% year-on-year to over Rs 1.87 lakh croreIt is touching a monthly high, said data released by the finance ministry on Monday.
Manufacturing activity in India picked up further and reached a four-month high in April. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) rose to 57.2 in April from 56.4 in March.