On Tuesday, the rupee was seen trading in a limited range against the US dollar in the morning session. The American currency appeared to be weak while domestic equities showed a muted trend. Foreign fund outflows further weighed on the local unit, according to forex traders.
The rupee began trading at 81.95 against the dollar at the interbank foreign exchange, and touched a high of 81.86 in the initial deals. The previous day, the rupee had settled at 81.92 against the US dollar.
The dollar index, which measures the strength of the greenback against a basket of six currencies, was trading at 101.33, down 0.02 per cent. Meanwhile, global oil benchmark Brent crude futures fell 0.01 per cent to USD 82.72 per barrel.
On the domestic equity market front, the BSE Sensex was trading 4.41 points or 0.01 per cent lower at 60,051.69 points. The broader NSE Nifty declined 2.40 points or 0.01 per cent to 17,741.00 points. According to exchange data, foreign institutional investors were net sellers in the capital market on Monday as they offloaded shares worth Rs 412.27 crore.
Head of Treasury at Finrex Treasury Advisors LLP, Anil Kumar Bhansali, stated that the rupee will likely remain between the levels of 81.80 to 82.20, as the Reserve Bank of India buys dollars at lower levels and inflows continue at higher levels, effectively keeping it well boxed in the small range for the moment.
In summary, the rupee was seen trading in a narrow range against the US dollar due to a combination of factors, including the weak American currency, muted domestic equities, and foreign fund outflows. However, according to an expert in the field, the rupee will likely continue to remain within the same range for the time being.
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