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| Photo Credit: K. Pichumani
The rupee consolidated in a narrow range and settled for the day higher by 1 paisa at 83.30 against the U.S. dollar on April 24, as the support from positive domestic equities was negated by rising American currency.
Forex traders said elevated crude oil prices and significant foreign fund outflows in the international market dented investors’ sentiments.
At the interbank foreign exchange market, the local unit opened at 83.29 against the greenback. The unit hit an intra-day high of 83.26 and a low of 83.33 against the greenback.
The domestic unit finally settled at 83.30 (provisional) against the dollar, 1 paisa higher from its previous close.
On Tuesday, the rupee closed at 83.31 against the American currency.
Forex traders said the rupee is expected to trade with a slight positive bias on improved global risk sentiments and easing of geopolitical tensions in the Middle East. However, any fresh aggressions in the Middle East may cap gains for the local unit.
Brent crude futures, the global oil benchmark, fell 0.34% to $88.12 per barrel.
“Geopolitical risks in the Middle East and talks of fresh energy sanctions on Iran could see some occasional hiccups in prices to move higher but we don’t expect prices to sustain USD 85 for a short duration,” said Mohammed Imran – Research Analyst at Sharekhan by BNP Paribas.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 105.84, higher by 0.16%.
“We expect the rupee to trade with a slight positive bias on rise in risk appetite in global markets and easing geopolitical tensions in the Middle East. However, hawkish comments from the Fed may support the dollar at lower levels,” said Anuj Choudhary Research Analyst, Sharekhan by BNP Paribas.
However, any fresh aggressions in the Middle East may cap sharp upside. Traders may take cues from durable goods orders data from the US. Investors may remain cautious ahead of inflation data later this week. USD-INR spot price is expected to trade in a range of Rs 83.05 to Rs 83.50, Choudhary added.
On the domestic equity market front, Sensex advanced 114.49 points, or 0.16%, to settle at 73,852.94 points. The Nifty rose 34.40 points, or 0.15%, to close at 22,402.40 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday as they offloaded shares worth ₹3,044.54 crore, according to exchange data.