The rupee consolidated in a narrow range and settled for the day lower by 7 paise at 83.55 (provisional) against the U.S. dollar on Thursday even as both the domestic equity benchmark indices touched all-time high levels.
Forex traders said rupee was seen resilient against the dollar, even after volatility witnessed in the dollar index, due to CPI data and U.S. Fed’s policy decision.
At the interbank foreign exchange, the local unit opened at 83.52 and finally settled for the day lower by 7 paise at 83.55 (provisional) against the American currency.
On Wednesday, the rupee appreciated 11 paise to close at 83.48 against the U.S. dollar.
“Rupee traded sideways in a range of 83.52-83.57 with stability. Even after volatility witnessed in the dollar index, due to CPI data and Fed’s policy decision, the rupee was seen resilient against the dollar.”
“Now the trend in rupee will remain range bound but underlying tone remains weak as rupee consolidation continues near all-time low. Major fall in dollar below $103 only will give strong rupee buying above 83.00 till then 83.20-83.75 approx range will be seen,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 104.81, higher by 0.17%.
Brent crude futures, the global oil benchmark, declined 0.84% to $81.91 per barrel.
On the domestic macroeconomic front, India’s industrial production growth slipped to 3-month low of 5% in April 2024, mainly due to poor show by the manufacturing sector, though mining and power segments performed well, according to official data.
Meanwhile, retail inflation continued its downward slide to reach a one-year low of 4.75% in May due to a marginal decline of prices in the food basket and remained within the Reserve Bank’s comfort zone of below 6%, according to government data released on Wednesday.
On the domestic equity market, the 30-share BSE Sensex rose 204.33 points, or 0.27%, to close at a new peak of 76,810.90 points. The broader NSE Nifty settled 75.95 points or 0.33% higher at a record level of 23,398.90 points.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday as they purchased shares worth ₹426.63 crore, according to exchange data.