Mumbai, Aug 12 (PTI) The rupee appreciated 12 paise to close at 87.63 against the US dollar on Tuesday amid encouraging domestic macro data and expectations of easing global trade tensions.
However, a negative
trend in domestic equities and unabated foreign capital outflows restricted the gains in the local unit, traders said. At the interbank foreign exchange, the domestic unit opened at 87.70 and moved in a range of 87.59-87.73 during the day before settling at 87.63, up by 12 paise over its previous close.
On Monday, the domestic unit closed at 87.75 against the US dollar.
Investors are in a wait-and-watch mode ahead of the US CPI inflation data and are also awaiting cues from the US-Russia talks on August 15, traders said.
Meanwhile, US President Donald Trump extended a trade truce with China for another 90 days on Monday, at least delaying once again a dangerous showdown between the world’s two biggest economies.
Retail inflation slowed to an 8-year low of 1.55 per cent in July, falling below the Reserve Bank’s comfort zone for the first time since January 2019, helped by subdued prices of food items, according to government data released on Tuesday.
“We expect the rupee to trade with a negative bias on account of the ongoing trade tariff war between India and the US. Sustained FII outflows may also pressurise the rupee.
“However, weakness in the US Dollar and declining crude oil prices may support the rupee at lower levels. Investors now focus on the US and Indian inflation data this week. USD/INR spot price is expected to trade in a range of 87.40 to 87,” said Anuj Chaudhary, Research Analyst Commodities and Currencies, Mirae Asset Sharekhan.
Meanwhile, Brent crude prices rose 0.41 per cent to USD 66.70 per barrel in futures trade.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.04 per cent to 98.55.
On the domestic equity market front, Sensex dropped 368.49 points to settle at 80,235.59, while Nifty declined 97.65 points to close at 24,487.40.
Foreign Institutional Investors offloaded equities worth Rs 3,398.80 crore on Tuesday, according to exchange data. PTI DRR BAL BAL BAL
