Rupee settles 3 paise lower at 83.51 against US dollar

Mumbai, May 10 (PTI) The rupee stayed range-bound and settled 3 paise lower at 83.51 against the US dollar on Friday, as the support from positive domestic equities was negated by elevated crude oil prices.

Forex traders said sustained outflow of foreign capital dented investors’ sentiments.

At the interbank foreign exchange market, the local unit traded in a narrow range. It opened at 83.48, and touched an intraday high of 83.46 and a low of 83.51 during the day. The domestic unit finally settled for the day at 83.51, down 3 paise from its previous close.

On Thursday, the rupee closed at 83.48 against the American currency.

The Indian rupee traded on a flat note. Positive domestic markets and a weak US dollar supported the rupee, however, a rise in crude oil prices and sustained foreign fund outflows capped sharp gains, said Anuj Choudhary Research Analyst, Sharekhan by BNP Paribas.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 105.23, higher by 0.01 per cent.

The retreating dollar was attributed to rising weekly unemployment claims from the US. Weekly unemployment claims rose to 231,000 versus 209,000 in the prior week and the forecast of 212,000.

“We expect the rupee to trade with a slight negative bias and the US dollar may rise again amid hawkish Fed speak and safe-haven demand amid geopolitical tensions in the Middle East,” Choudhary said.

Selling pressure by foreign investors and rising global crude oil prices may also pressurise the rupee. However, a rise in risk appetite in global markets may support the rupee at lower levels. “Traders may take cues from India’s IIP data and Michigan consumer sentiment data from the US. USD-INR spot price is expected to trade in a range of Rs 83.30 to Rs 83.75,” Choudhary added.

Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said the Indian rupee is expected to remain in a small range of 83.40 to 83.60 as FPIs buy dollars and RBI sells them to keep it in a range.

“Any small dip is a buy for importers for 1-2 weeks with a stop loss at 83.60 for unhedged positions.

“At 83.50, we expect exporters to hedge for one month and watch the election results and then take a call for further hedging,” Bhansali said.

Brent crude futures, the global oil benchmark, rose 0.62 per cent to USD 84.40 per barrel.

On the domestic equity market, the 30-share BSE Sensex advanced 260.30 points, or 0.36 per cent to close at 72,664.47 points. The broader NSE Nifty settled 97.70 points or 0.44 per cent higher at 22,055.20.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday as they offloaded shares worth Rs 2,117.50 crore, according to exchange data.

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