The rupee lost its initial gains and fell 22 paise to close at 83 against US dollar on Tuesday. This was due to a weak greenback and continued outflows of foreign funds.
The rupee opened at 82.69 to the greenback in the interbank foreign currency market. However, it lost its momentum and dropped to an intraday low of 83.00.
The final settlement of the domestic currency was at 83.00. This is 22 paise less than its previous close at 82.78. Last October 19, 2021, the domestic currency closed at the 83 mark.
The dollar index, which measures the strength of the greenback against a basket made up six currencies, traded 1 percent higher at 104.55.
Brent crude oil futures rose 0.02 percent to USD 85.93 per bar.
Dilip Parmar (HDFC Securities Research Analyst) said that the Indian rupee continued to slide as dollar buyers rushed to buy it. However, inflows were still low as traders waited for Wednesday’s minutes of the Federal Open Market Committee meeting.
Spot USD-INR has been consolidating within a narrow range of 82.40 – 82.95.
The chances of a greenback price movement against major currencies is greater than the possibility of an upward breakout in the pair. Parmar said that once the breakout confirms above the 83 mark, the short-covering rally and levels of 83.50 or 83.70 will be visible in a very short time.”
The 30-share BSE Sensex closed at 126.41 points, 0.21 percent higher at 61.294.20. Meanwhile, the wider NSE Nifty climbed to 35.10 points, 0.19 percent, at 18,232.55.
According to exchange data, foreign institutional investors (FIIs), remained net sellers on Tuesday as they sold shares worth Rs 628.07 million.
Anindya Benderjee, VP – Currency Derivatives & Rate Derivatives, Kotak Securities Ltd., stated, “Market will feel nervous going into Fed Minutes tomorrow night. We expect USD-INR trade between 82.70 & 83.25.”
Jateen Trivedi (VP Research Analyst, LKP Securities) stated that the rupee traded between 82.50 and 83.00 since mid-2018 2022. If it breaches 83.00, it will likely experience another round of weakness.
