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The rupee opened on a flat note against the U.S. dollar in early trade on Thursday, as the support from positive domestic equities was negated by sustained foreign fund outflows and elevated crude oil prices.
Forex traders said the rupee remains under pressure due to ongoing elections as well as foreign fund outflows and the same shall subside once the results are out.
At the interbank foreign exchange market, the local unit moved in a narrow range. It opened at 83.45 against the American currency and touched 83.46.
On Wednesday, the rupee had settled at 83.46 against the U.S. dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 104.20, lower 0.13%.
Brent crude futures, the global oil benchmark, rose 0.40% to $83.08 per barrel.
“Despite short-term pressure on the rupee due to internal factors, external conditions have turned in its favour. Recent U.S. CPI and retail sales data indicate that inflation is resuming its downward trend,” CR Forex Advisors MD Amit Pabari said.
In the short term, the rupee is expected to rise to around 83.20 to 83.00 levels, with medium-term expectations pointing to an appreciation to around 82.80 to 82.50 levels, Pabari added.
On the domestic equity market, the 30-share BSE Sensex was trading 118.73 points, or 0.16% higher at 73,105.76 points. The broader NSE Nifty was up 50.50 points, or 0.23%, to 22,251.05 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday, as they offloaded shares worth ₹2,832.83 crore, according to exchange data.