The Indian rupee was virtually unchanged at 90.66 (provisional) on Monday in relation to the U.S. dollar which means that there was the rangebound day in the foreign exchange market. The flat close was brought by the fact that the positive gains in the domestic equity markets were countered by the fact that the United States dollar remained strong in the foreign markets.
The rupee was trading a little above in the interbank foreign exchange market at 90.63 against the greenback. It gambled in a tight range during the session with an intraday peak of 90.61 and low of 90.72 before closing at 90.66. According to the currency traders, the situation of balanced demand and supply maintained the rupee within a narrow band during the day.
The dollar index that gauges the strength of the U.S. dollar against a six-currency basket was going 0.09 percent higher at 96.91. It is the fact that the firm dollar abroad constrained any meaningful appreciation of the rupee in spite of favorable domestic conditions such as stable capital inflows and favorable dynamics in the local stock markets.
In the meantime, the world crude oil prices were weakly traded. The global standard, which is the Brent crude, was at a 0.47% discount at the futures trade of 67.43 barrel in price. The prices of crude have generally been low, which provides some cushioning to the rupee which is the largest importer of oil and the low prices relieve strain on the trade deficit of the country.
Global economic indicators, the U.S. macroeconomic indicators and foreign capital flow will now be under close observation by the market players as it gives further guidance in currency market within the next few sessions.
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