The Indian rupee pared its initial gains and turned flat at 83.87 against the U.S. dollar in early trade on Tuesday (August 20, 2024), as positive domestic equity markets and a weak American currency were negated by the outflow of foreign capital.
Forex traders said softening crude oil prices supported the local unit and prevented its fall.
At the interbank foreign exchange, the rupee opened at 83.86 against the greenback, inched up to 83.84 before trading again at its previous session’s closing level of 83.87 against the dollar.
On Monday (August 19, 2024), the rupee settled 8 paise higher at 83.87 against the American currency.
Over the past holiday-shortened week, the rupee showed minimal fluctuation and narrowly steered clear of the critical of 84-mark.
Investors are expected to remain cautious ahead of PMI data from the U.S. and Federal Reserve Chair Jerome Powell’s speech at Jackson Hole Symposium for any cues on rate cuts by the central bank.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.10% to 101.82.
Brent crude, the global oil benchmark, declined 0.68% to $77.13 per barrel.
On the domestic equity market front, Sensex advanced 188.93 points, or 0.23%, to 80,613.61 points. The Nifty rose 60.15 points, or 0.24%, to 24,632.80 points.
Foreign institutional investors (FIIs) were net sellers in the capital markets on Monday, offloading shares worth ₹2,667.46 crore, according to exchange data.