On May 29, the Rupee pared initial gains to settle five paise lower at 83.18 against the U.S. dollar.
| Photo Credit: The Hindu

The Rupee depreciated nine paise to 83.27 against the U.S. dollar on May 29, tracking a negative trend in domestic equities and elevated crude oil prices.

Forex traders said the local unit faced some resistance due to subdued sentiment in the domestic equity market and strengthening of the American currency in the overseas market.

At the interbank foreign exchange market, the local unit opened at 83.22 and lost further ground to trade at 83.27 against the greenback, registering a loss of nine paise from its previous closing level. On Tuesday, the Rupee pared initial gains to settle five paise lower at 83.18 against the U.S. dollar.

“The Indian Rupee was sold off on Tuesday as oil and probably the Reserve Bank of India (RBI) bought dollars (about $1 billion) to keep Rupee appreciation in control before the month-end and the Lok Sabha election results,” said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.

“The USD/INR pair is likely to trade with a narrow range of 83.15/25 during the day,” Mr. Bhansali added. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 104.72, higher by 0.11%.

Brent crude futures, the global oil benchmark, advanced 0.21% to $84.40 per barrel. On the domestic equity market, the 30-share BSE Sensex was trading 227.75 points, or 0.30% lower at 74,942.70 points. The broader NSE Nifty fell 74.30 points or 0.32% to 22,813.85 points in initial trade.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Tuesday, as they purchased shares worth ₹65.57 crore, according to exchange data.

Image for representational purpose only.
| Photo Credit: V.V. Krishnan

The rupee stayed firm and rose 9 paise to 82.74 against the U.S. dollar in early trade on March 7 on the back of a weak American currency overseas and sustained inflow of foreign funds in the domestic capital markets.

The local currency also found support from positive equity markets, however, volatile crude oil prices capped its rally, Forex traders said.

At the interbank foreign exchange, the domestic currency opened at 82.82 and gained further to trade at 82.74 against the greenback, climbing 9 paise from its previous close.

On March 6, the rupee settled 7 paise higher at 82.83 against the U.S. dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, declined by 0.07% to 103.24.

The low level of dollar index was attributed to the U.S. payroll data released on March 6, which showed lower-than-expected job growth in February.

Also, the indication of dovish monetary policy moves by Federal Reserve chairman Jerome Powell in his testimony before the Congress impacted the market participants, according to analysts.

Brent crude futures, the global oil benchmark, fell 0.13% to $82.85 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 58.49 points or 0.08% higher at 74,144.48 points. The broader NSE Nifty rose 17.00 points or 0.08% to 22,491.05 points.

Foreign institutional investors (FIIs) were net buyers in the capital markets on March 6 as they bought shares worth ₹2,766.75 crore, according to exchange data.