On Monday, the rupee lost some of its early gains and fell 2 paise to close at 81.80 (provisional) against the U.S. dollar, following a rise in crude oil prices. The gains from a weak American dollar and strong domestic equities were offset by a rise in crude oil prices, according to forex traders, who claimed the rupee consolidated in a constrained range.
Despite a bullish start at the interbank foreign exchange and a strong trend in domestic markets, the local unit lost some of its early gains to close 2 pence weaker at 81.80 against the U.S. dollar. The rupee’s value against the dollar fluctuated during the day between 81.70 and 81.82.
The dollar index, which measures how strong the dollar is relative to a basket of six different currencies, decreased 0.07 percent to 101.13. The international benchmark for crude oil, Brent, increased 1.93 percent to USD 76.75 a barrel.
Today’s significant increase in crude oil prices caused the rupee to lose value. Anuj Choudhary, a research analyst at Sharekhan by BNP Paribas, stated that the weak U.S. Dollar and strong domestic equities buffered the downside.
“Given the increase in risk appetite on international markets and the depreciating U.S. Dollar, we anticipate the rupee to trade with a little positive tilt. Over the past seven days, FIIs have continued to be net buyers.
The steep rise could be limited, though, by a resurgence in crude oil prices. The U.S. and India’s inflation figures later this week may cause investors to maintain their caution. We anticipate that in the near future, the USD/INR spot rate will fluctuate between 81.20 and 82.20,” according to Choudhary.