The rupee on Tuesday edged higher by 12 paise at 74.96 against the US dollar, tracking a positive trend in domestic equities and fall in crude oil prices.
Analysts said a weak greenback against major global rivals and a moderation in US Treasury yields also supported the local unit.
In the interbank forex market, the rupee opened at 75.05 against the greenback and later saw an intra-day high of 74.95 and a low of 75.17. It finally closed at 74.96 against the US currency.
On Monday, the rupee had closed 18 paise lower at 75.08 against the US currency.
Sriram Iyer, Senior Research Analyst, Reliance Securities, said broader gains in regional equities and currencies supported the rupee. Softening crude oil prices and US Treasury yields also helped the local unit during the European trading session.
“Also, fund inflows will continue in the initial public offerings this week and this has supported the rupee in the last few trading sessions,” Mr. Iyer said. Cooperation.
However, dollar demand from state-run banks on the part of importers limited large gains in the local unit.
Gaurang Somaiya, Forex and Bullion Analyst, Motilal Oswal Financial Services, said, “The rupee consolidated in a narrow range in the first hour of the session, but gained higher on gains in domestic equities and a retracement in the dollar.”
Market participants remain cautious ahead of the crucial fiscal balance numbers to be released on the domestic front.
Mr. Somaiya further said that on the global front, the focus will be on US consumer confidence numbers and better-than-expected numbers could drive gains for the dollar.
“We expect USDINR (Spot) to trade sideways and bid in the range of 74.70 and 75.20,” Mr. Somaiya said.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.01% to 93.80.
On the domestic equity market front, the BSE Sensex closed 383.21 points or 0.63% higher at 61,350.26, while the broader NSE Nifty ended 143 points or 0.79% higher at 18,268.40.
Global oil benchmark Brent crude futures fell 0.40% to $85.65 a barrel.
Foreign institutional investors were net sellers in the capital markets on Monday as they sold shares worth Rs 2,459.10 crore, according to exchange data.
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