The Indian rupee undid its opening markers to close 5 paise down at 86.36 (provisional) against the US dollar on Tuesday following ambiguity about the results of India-US trade talks before the August 1 deadline of the potential imposition of tariffs on Indian imports in the US.
The rupee started at 86.26 against the dollar at the interbank foreign exchange market, its intra-day high being 86.22 and low 86.41, and closed at 86.36 as compared to its previous close of 86.31 on Monday when it had lost 15 paise.
Forex traders pointed out that the weakness in the US dollar and decline in the prices of crude oil gave some impetus to the rupee when the pair was lower down, but at the same time, foreign fund outflows and a damp domestic equity market did not allow the rupee to pick up gains.
The dollar index, that tracks the strength of the greenback against a basket of six major currencies, declined 0.03 per cent to 97.82. In the meantime, Brent crude futures dropped 0.94 per cent to reach USD 68.56 per barrel, which put more firepower on the rupee.
The BSE Sensex also closed slightly down by 13.53 points or 0.02 per cent at 82,186.81, and broader NSE Nifty declined 29.80 points or 0.12 per cent to Covid 19 switzerland 25,060.90.
The selling spree by foreign institutional investors (FIIs) has shown no sign of stopping, and as per the exchange data on Monday, the FIIs sold equities worth Rs 1,681.23 crore, which put further pressure on the local currency.
Trading members are still attentive to the next deadline of the trade talks between the US and India, where it might impose tariffs on the exports of India in case of any non-agreement, which can also hurt the rupee further in upcoming sessions.
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