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New Delhi: The rupee consolidated in a narrow range and settled for the day 1 paise higher at 82.11 against the US dollar on Wednesday, as participants remained on the sidelines ahead of the release of the retail inflation data.
At the interbank foreign exchange market, the local unit opened at 82.08 against the US currency and touched a high of 82.01 during intra-day.
It finally closed at 82.11 against the greenback, registering a gain of 1 paise over its previous close.
On Tuesday, the rupee closed at 82.12 against the US currency.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.51 per cent to 101.69.
Global oil benchmark Brent crude futures advanced 1.53 per cent to USD 86.92 per barrel.
“The Indian rupee tread water along with the dollar index ahead of the crucial inflation data from the US and India. The rupee consolidates in the narrow range with thin volume and volatility even after stronger domestic equities and foreign fund inflows,” said Dilip Parmar, Research Analyst, HDFC Securities.
The market is pricing in for lower inflation readings after last week’s surprise rate pause by RBI.
In the near-term, spot USDINR is expected to trade between 81.70 to 82.50.
According to Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas the Indian rupee appreciated on Wednesday on positive domestic equities and a weak US dollar. However, a surge in crude oil prices and the IMF slashing India’s GDP forecast capped sharp gains.
The IMF cut India’s GDP forecast for 2023 to 5.9 per cent from 6.1 per cent in its previous estimate amid concerns over global economic uncertainty.
The US dollar fell after US Fed officials flagged recession worries in the US this year due to rising interest rates and a slowdown in lending.
“We expect Indian rupee to trade with a slight negative bias on concerns over monsoon after Skymet forecast below normal rains. Any pickup in US dollar amid rate hike expectations and positive crude oil prices may also weigh on rupee,” Choudhary said.
However, positive domestic markets and fresh FII inflows may support rupee at lower levels.
On the domestic equity market front, the 30-share BSE Sensex advanced 235.05 points or 0.39 per cent to end at 60,392.77 and the broader NSE Nifty gained 90.10 points or 0.51 per cent to 17,812.40.
Foreign Institutional Investors (FIIs) were net buyers in the capital market on Wednesday as they purchased shares worth Rs 1,907.95 crore, according to exchange data.
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( With inputs from www.siasat.com )