The Indian rupee moved in a narrow range on Tuesday and closed barely up at 87.72 (provisional) against the US dollar, boosted by a mild rally, but weighed down by poor activity in local bourses and outflow of foreign funds.
The local currency opened at 87.70 at the interbank foreign exchange market, which means that it was trading in a tight range of 87.59 to 87.72 throughout the day, according to forex traders. The subdued gains were contained because late sluggishness in equity markets and foreign institutional investment (FIIs) selling influenced counteracted any vigorous gains.
Sentiment in the market was also watchful as there were several doubts regarding the current trade-tariff scenario between India and the United States that contributed to the overall negative tilt in the trade of currencies. Even the foreign institutional investors (FIIs) had sold 1,20265 crore equities on Monday as per exchange data, adding more downwards pressure to the upside possibility of the rupee.
Brent crude oil futures in commodities went up 0.41 percent to USD 66.70 per barrel, an aspect that can affect the trade deficit and the currency performance of India. At the same time, the dollar index that tracks the health of the greenback against a composite index of six currencies edged up by 0.04 percent to 98.55, indicating the strength of the US currency in the global arena.
On the domestic equities side, both main indices ended negatively. BSE Sensex slumped by 368.49 points to 80,235.59 and NSE Nifty by 97.65 points to 24,487.40. However, equities faltered with broader fear over the economic situation of the world and geopolitical crisis.
Analysts observed that foreign capital flows, changes in the price of crude oil, and trade negotiating progress between India and the US will most likely shape the way the rupee moves forward.
Join our whatsapp group for Latest updates
Click Here for Chhattisgarh News
Click Here for Entertainment News