MUMBAI, May 2 (PTI): The rupee consolidated in a narrow range and settled 6 paise lower at 81.88 (provisional) against the American currency on Tuesday as investors preferred to stay on the sidelines ahead of the US Fed meeting outcome.
At the interbank foreign exchange, the local unit opened on a positive note at 81.75 but pared early gains to settle 6 paise lower at 81.88 against the US dollar despite a firm trend in domestic equities.
During the day, the rupee touched a high of 81.72 and a low of 81.95 against the American currency.
On Friday, the rupee closed at 81.82 against the US 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 per cent to 102.30.
Brent crude futures, the global oil benchmark, declined 0.55 per cent to USD 78.87 per barrel.
Forex traders said investors are waiting for cues from the US FOMC meeting beginning later in the day. The market now awaits the Federal Open Market Committee (FOMC) outcome on May 3.
The rupee weakened throughout the day as traders and hedgers bet on the dollar ahead of the FOMC policy decision tomorrow, Dilip Parmar, Research Analyst, HDFC Securities said.
“Spot USD/INR is expected to hold support at 81.50, the 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,” Parmar said.
This week will be a holiday shortened as the market remains open only for three trade sessions.
In the domestic equity market, the 30-share BSE Sensex advanced 242.27 points or 0.40 per cent to close at 61,354.71. The broader NSE Nifty rose 82.65 points or 0.46 per cent to settle at 18,147.65.
Foreign Institutional Investors (FIIs) were net buyers in the capital market on Friday as they purchased shares worth Rs 3,304.32 crore, according to exchange data.
On the domestic macroeconomic front, record GST collections and a four-month high manufacturing PMI are aiding bullish sentiments.
The GST collection in April rose by 12 per cent annually to over Rs 1.87 lakh crore, touching an all-time monthly high, the finance ministry data released on Monday said.
Manufacturing activities in India accelerated further and touched a four-month high in April. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) increased from 56.4 in March to 57.2 in April.