The Indian rupee demonstrated marginal gains, edging up by 1 paisa to reach 83.36 against the US dollar in the early trading session on Tuesday. This uptick was attributed to a combination of factors, including a surge in foreign fund inflow and a slight weakening of the US currency against its major counterparts.
Traders noted that positive signals from the domestic equity market bolstered investor confidence. However, the appreciation of crude oil prices exerted downward pressure on the Indian currency.
In the interbank foreign exchange market, the rupee initiated the trading day at 83.36 against the greenback, reaching an intraday high of 83.35 before settling at 83.36, marking a modest increase of 1 paise compared to its previous close of 83.37 on Monday.
Gaurang Somaiya, a forex and bullion analyst at Motilal Oswal Financial Services, pointed out that the US dollar exhibited low volatility across major crosses on the preceding day. This cautious market sentiment was attributed to the upcoming Federal Open Market Committee (FOMC) policy statement scheduled for later.
Somaiya highlighted the significance of keeping an eye on domestic economic indicators, particularly inflation data and industrial output numbers set to be released later in the day. He anticipated that the USD-INR (spot) would trade between 83.20 and 83.50.
Simultaneously, the dollar index, gauging the greenback’s strength against a basket of six currencies, showed a marginal uptick of 0.11% to reach 103.58 on Tuesday. Brent crude futures, the global oil benchmark, saw a modest uptick of 0.28%, reaching USD 76.24 per barrel.
In the domestic equity market, the 30-share BSE Sensex experienced a marginal gain of 0.11%, reaching 70,006.03 points, while the broader NSE Nifty rose by 0.16% to 21,029.95 points. Foreign Institutional Investors (FIIs) exhibited a positive trend as net buyers on Monday’s capital market, acquiring shares worth Rs 1,261.13 crore, per exchange data.