Mumbai, July 18 (PTI): The rupee consolidated in a narrow range and settled flat at 82.03 (provisional) against the US dollar on Tuesday, as the support from positive domestic equities and weak American currency was negated by rising crude oil prices.
Market participants remained cautious ahead of retail sales data from the US and the UK’s inflation data this week, forex traders said.
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At the interbank foreign exchange market, the rupee opened at 82.01 against the US dollar and finally settled at 82.03 (provisional), unchanged from its previous close.
During the session, the domestic unit witnessed an intra-day high of 81.97 and a low of 82.07.
In the previous session on Monday, the rupee had closed at 82.03 against the dollar.
The rupee traded with a slight positive bias on a soft dollar and bullish domestic markets. Domestic markets hit new record highs which boosted the local currency.
The US dollar has declined to a 15-month low on rising expectations of just one more rate hike by the US Federal Reserve as inflation declined more than forecast.
“We expect the rupee to trade with a slight positive bias on account of strength in domestic markets and a weak greenback. Sustained foreign inflows may also support rupee,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
“However, risk aversion in global markets and concerns over global economic slowdown may cap a sharp upside. Market participants may remain cautious ahead of retail sales, and industrial production capacity utilisation rate data from the US. We expect the USDINR spot to trade between 81.60 to 82.50 in the near-term,” Choudhary added.
Traders said domestic equity benchmarks scaling all-time high levels and weakness in the American currency overseas boosted investor sentiments and restricted the depreciating bias.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.07 per cent to 99.77.
Brent crude futures, the global oil benchmark, rose 0.62 per cent to USD 78.99 per barrel.
In the domestic equity market, the 30-share BSE Sensex was trading 205.21 points or 0.31 per cent higher at 66,795.14. The broader NSE Nifty advanced 37.80 points or 0.19 per cent to 19,749.25.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Monday as they purchased shares worth Rs 73 crore, according to exchange data.
