The rupee consolidated in a narrow range and settled for the day, 3 paise lower at 82.78 (provisional) against the US dollar on Tuesday, as market participants remained on the sidelines ahead of the release of key macroeconomic data.

Also read: Rupee jumps 9 paise to 82.74 against US dollar in early trade

Forex traders said the Indian rupee declined marginally on positive US dollar and recovery in crude oil prices. However, positive domestic markets and sustained foreign fund inflows over the past three sessions supported the local unit at lower levels.

At the interbank foreign exchange market, the local unit opened at 82.74 and touched the intra-day low of 82.78 and a high of 82.72 against the greenback. The local unit finally settled at 82.78 (provisional) against the dollar, registering a loss of 2 paise from its previous close.

On Monday, the rupee declined by 8 paise to settle at 82.75 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.01 per cent lower at 102.85, ahead of inflation data from the US.

Brent crude futures, the global oil benchmark, advanced 0.81 per cent to $82.88 per barrel.

"We expect the rupee to trade with a slight negative bias on recovery in the greenback and concerns over elevated crude oil prices. However, a positive tone in domestic markets may support the rupee at lower levels.

"Traders may take cues from India's CPI and IIP data. Market participants may remain cautious ahead of inflation and budget deficit data from the US. USD-INR spot price is expected to trade in a range of ₹82.50 to ₹83," said Anuj Choudhary Research Analyst, Sharekhan by BNP Paribas.

On the domestic equity market front, Sensex jumped 165.32 points or 0.22 per cent, to settle at 73,667.96 points. The Nifty rose 3.05 points or 0.01 per cent, to close at 22,335.70 points.

Also read: Rupee appreciates 7 paise to settle at 82.83 against US dollar

Foreign institutional investors (FIIs) were net buyers in the capital markets on Monday as they bought shares worth ₹4,212.76 crore, according to exchange data.