The rupee pared initial gains to settle marginally up by 1 paisa at 74.02 against the US dollar on Tuesday amid a lacklustre trend in domestic equities.

At the interbank forex market, the domestic unit opened strong at 73.92 but erased early gains to finally close at 74.02, up 1 paisa from its previous closing of 74.03.

During the session, the domestic unit witnessed an intra-day high of 73.85 and a low of 74.09 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.13 per cent to 93.93.

On the domestic equity market front, the BSE Sensex declined 112.16 points or 0.19 per cent to end at 60,433.45, while the broader NSE Nifty fell 24.30 points or 0.13 per cent to 18,044.25.

Brent crude futures, the global oil benchmark, rose 0.90 per cent to $84.18 per barrel.

Foreign institutional investors were net sellers in the capital market on Monday, as they offloaded shares worth Rs 860.65 crore, as per exchange data.

"Rupee traded in a range near 74.00, as the dollar index held rates after selling was observed in the last few days on the back of a dovish statement from the US FED. With crude prices also inching lower. Going ahead rupee can be seen in a range of 73.75-74.25," said Jateen Trivedi, Senior Research Analyst at LKP Securities.

According to Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd, the USD/INR spot closed flat near 74.02 levels, thanks to suspected RBI intervention at lower levels.

"IPO inflows have been a major contributor in driving USD/INR from 75.00 to 74.00 levels on spot. With the PAYTM IPO about to conclude, IPO inflows may get over soon," Banerjee said.

Banerjee added that assuming the Reserve Bank of India increases the pace of intervention, USD/INR may slip into a range of 73.75 and 74.50 over the near term.

Related Topics
comment COMMENT NOW