Rupee settles almost flat at 83.03 against US dollar

According to Jateen Trivedi, VP Research Analyst at LKP Securities, the rupee experienced a volatile trading session with an initial positive rally.

The rupee closed almost flat at 83.03 against the US dollar on Monday as elevated crude oil prices and global inflation worries weighed on the local currency despite a record rally in equities fuelled by FII inflows.

A weak American currency against major rivals overseas also supported the domestic unit and restricted the fall, forex traders said.

At the interbank foreign exchange market, the local unit opened at 82.93 against the US dollar and moved between the peak of 82.83 and the lowest level of 83.06.

The rupee finally settled 1 paisa lower at 83.03 against the previous close.

On Friday, the Indian unit had appreciated 21 paise to close at 83.02 against the greenback.

"We expect the rupee to trade with a slight positive bias on the soft US dollar, positive domestic markets and a correction in crude oil prices. However, concerns over global economic slowdown and rising expectations of a rate hike by FOMC amid strong economic data from the US may cap sharp gains," Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said.

Choudhary said that traders may remain cautious ahead of inflation data from India and the US later this week. "USD/INR spot price is expected to trade in a range of Rs 82.40 to Rs 83.30..

According to Jateen Trivedi, VP Research Analyst at LKP Securities, the rupee experienced a volatile trading session with an initial positive rally.

"However, the rupee's upward momentum was limited as the dollar index remained firm, holding above 104. Consequently, the rupee retraced from its highs and closed the session nearly flat.

"One major factor contributing to the rupee's weakness was the recent rise in crude oil prices. As long as crude oil prices remain above USD 85 for Brent and USD 82 for WTI, the rupee may continue to face downward pressure, potentially falling towards 83.25," Trivedi added..

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.42 per cent to 104.65.

Brent crude futures, the global oil benchmark, were trading 0.30 per cent lower at USD 90.38 per barrel.

On the domestic equity market front, the BSE Sensex regained the 67,000-level and closed 528.17 points or 0.79 per cent higher at 67,127.08. The broader NSE Nifty advanced 176.40 points or 0.89 per cent to 19,996.35.

Foreign institutional investors (FIIs) turned net buyers in the capital markets on Monday as they purchased shares worth Rs 1,473.09 crore on net basis, according to exchange data.