Mumbai: The Indian rupee held an extremely narrow trading range on Thursday, as traders awaited US consumer inflation data to gauge the next move in the direction of the local unit.
The rupee was trading at 82.3175 as of 0510 GMT, having barely changed from 82.3150 in the previous session.
The local unit has so far traded in the range of around eight paise, replicating the narrow range in the last two sessions.
The rupee fell to a record low of 82.6825 on Monday, but has managed to recover slightly due to possible intervention by the Reserve Bank of India, which offset trading volatility.
While it was difficult to narrow down the extent of RBI’s intervention in spot and forward, traders said it has been quite large, especially on Monday and Tuesday.
The RBI’s dollar sales range is estimated to range from $1.5 billion per day to $4 billion.
Now the focus is on US inflation data due later in the day. US consumer prices are expected to climb 8.1% year-on-year last month, according to economists polled by Reuters, while core inflation is projected at 6.5%.
US equities are likely to fall if the core CPI rises to 6.5%, while the dollar index may revisit its previous high of 114.80, and this could lead the rupee to test a new low of around 82.70 per dollar, and here May even move towards 83. Amit Pabri, Managing Director, CR Forex Advisors said.
Pabari said that if the core CPI remains near 6.3%, then the rupee will rise to the level of 81.80.
The dollar index was hovering near 113.28 and Asian currencies were mixed. Risk appetite was weak in Asia. -Reuters
Read also: