Indian rupee settles flat at 74.75 against US dollar

The rupee pared its initial gains and settled on a flat note at 74.75 (provisional) against the US dollar on Wednesday amid muted domestic equities and strengthening American currency.

At the interbank forex market, the domestic unit opened on a strong note at 74.61 against US dollar, but pared the gains and settled for the day at 74.75, down 1 paise from its previous close of 74.74 against the greenback.

During the session, the domestic unit witnessed high volatility and saw an intra-day high of 74.59 and a low of 74.87 against the American currency.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.27 percent to 95.37.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 198.68 points lower at 37,731.65 and broader NSE Nifty fell 65.20 points to 11,097.05.

"Overall the trend in USD-INR spot has been bearish, breaching the psychological level of 75 on weak dollar and risk on mood.

“In the past, the USD-INR spot has not been able to break the crucial support of 74.50 on likely RBI buying, and had bounced from there," said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.

Gupta further said: "We expect 74.50 to continue to act as a crucial support until the US decides on the fresh stimulus program. However, consistent trading below 74.50 will open doors for 74.20/74.25 with 75 acting as the crucial resistance".

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 2,265.88 crore on Tuesday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, slipped 1.04 percent to USD 43.86 per barrel.

(With PTI inputs)