The rupee pared its initial gains and settled 31 paise lower at 82.78 (provisional) against the US dollar on Monday, tracking the strength of the American currency in the overseas market.
At the interbank foreign exchange market, the local unit opened at 82.35 and witnessed a high of 82.32 and a low of 82.80.
It finally settled at 82.78 against the American currency, registering a fall of 31 paise over its last close of 82.47.
The Indian rupee depreciated on Monday amid strength in the US dollar. However, positive domestic equities and weak crude oil prices cushioned the downside, said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
Moreover, inflows by foreign investors supported the rupee at lower levels.
“We expect the rupee to trade with a negative bias amid strong US dollar amid increasing odds of an aggressive rate hike by the Fed on Wednesday. Some recovery in crude oil prices may also weigh on Rupee,” Choudhary added.
Traders may remain cautious ahead of manufacturing PMI and trade deficit data, which is expected to be released on Tuesday, Choudhary said, adding, “We expect USD-INR spot price to trade in the range of 81.80 and 83.30 in the next couple of sessions.”
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.28 per cent to 111.05.
Global oil benchmark Brent crude futures slipped 0.93 per cent to USD 94.88 per barrel.
On the domestic equity market front, the 30-share BSE Sensex rose 786.74 points or 1.31 per cent to end at 60,746.59, while the broader NSE Nifty advanced 225.40 points or 1.27 per cent to 18,012.20.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday as they purchased shares worth Rs 1,568.75 crore, according to exchange data.