Rupee settles 1 paisa lower at 83.52 against US dollar

Mumbai, May 8 (PTI) The rupee stayed range-bound and settled 1 paisa lower at 83.52 against the US dollar on Wednesday as the support from easing crude oil prices was negated by strong dollar demand.

Forex traders said a muted trend in domestic equities and significant foreign fund outflows dented investors' sentiments.

At the interbank foreign exchange market, the local unit traded in a narrow range. It opened at 83.50, and touched an intraday high of 83.49 and a low of 83.52 during the day. The local unit finally settled for the day at 83.52, down 1 paisa from its previous close.

On Tuesday, the rupee closed at 83.51 against the American currency.

"The Indian rupee traded flat to negative on weak domestic markets and strong US dollar. FII outflows also weighed on the rupee. However, a decline in crude oil prices cushioned the downside," said Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas.

"We expect the rupee to trade with a slight negative bias amid strength in the greenback and continued selling pressure by foreign investors. Positive global equities may support riskier currencies.

"Weakness in crude oil prices may support rupee at lower levels. USD-INR spot price is expected to trade in a range of Rs 83.30 to Rs 83.75," Choudhary added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was at 105.53, higher by 0.12 per cent as the US dollar gained on hawkish Fedspeak and geopolitical tensions in the Middle East.

Brent crude futures, the global oil benchmark, fell 1.37 per cent to USD 82.02 per barrel.

On the domestic equity market, the 30-share BSE Sensex fell 45.46 points, or 0.06 per cent to close at 73,466.39 points. The broader NSE Nifty settled flat at 22,302.50 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday as they offloaded shares worth Rs 6,669.10 crore, according to exchange data. "As FPIs sell equity and debt they have been buying US dollars to invest in US, keeping rupee pressured and making RBI to sell the US dollars to protect the rupee," said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.

"On Thursday, we expect the rupee to be 83.40 to 83.60 with jobless claims being the only major data from the US," Bhansali said. PTI DRR HVA