Rupee settles on flat note, higher by 2 paise at 83.50 against US dollar

The rupee consolidated in a narrow range and settled for the day on a flat note, higher by 2 paise at 83.50 (provisional) against the US dollar on Thursday, on weak domestic markets and a strong American currency.

Forex traders said massive foreign fund outflows dented investors' sentiments.

At the interbank foreign exchange market, the local unit traded in a narrow range. It opened at 83.49, and touched an intraday high of 83.44. The local unit finally settled for the day at 83.50 (provisional), higher by 2 paise over its previous close.

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On Wednesday, the rupee stayed range-bound and settled 1 paisa lower at 83.52 against the US dollar.

"The Indian rupee traded flat on weak domestic markets and a strong US dollar. The overnight jump in crude oil prices also put pressure on the rupee. However, likely dollar inflows supported the rupee earlier in the day," 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 105.70, higher by 0.15 per cent, as the US dollar gained on hawkish Fedspeak and geopolitical tensions in the Middle East.

"We expect the rupee to trade with a slight negative bias amid strength in the US dollar and selling pressure by foreign investors. However, mixed to positive Asian and European markets may support the rupee at lower levels.

"Any intervention by RBI or bond related foreign inflows may support rupee at lower levels. Traders may take cues from weekly unemployment claims data from US and speeches from Fed officials. USD-INR spot price is expected to trade in a range of ₹83.30 to ₹83.75," Choudhary said.

Brent crude futures, the global oil benchmark, rose 0.57 per cent to $84.06 per barrel.

On the domestic equity market, the 30-share BSE Sensex fell 1,062.22 points, or 1.45 per cent to close at 72,404.17 points. The broader NSE Nifty settled 345.00 points or 1.55 per cent lower at 21,957.50 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday, as they offloaded shares worth ₹6,669.10 crore, according to exchange data.

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