Rupee settles on flat note, down 1 paisa against US dollar

Mumbai, Aug. 11 (PTI): The Indian rupee settled just 1 paisa lower at 74.44 against the US dollar on Wednesday amid a muted trend in the domestic equity market.

At the interbank forex market, the local unit opened at 74.43 against the greenback and witnessed an intra-day high of 74.37 and a low of 74.48.

It finally ended at 74.44 against the American currency, registering a fall of just 1 paisa over its previous close.

In the previous session, the rupee had settled at 74.43 against the US dollar.

On the domestic equity market front, the BSE Sensex ended 28.73 points or 0.05 per cent lower at 54,525.93, while the broader NSE Nifty inched 2.15 points or 0.01 per cent higher at 16,282.25.

Rupee traded in a narrow range ahead of the important inflation number that will be released tomorrow; the expectation is that the number could remain in-line with the previous month number. Weakness in the currency was seen primarily as the dollar strengthened against its major crosses.

“Volatility for the greenback could increase in the latter half of the session following the release of CPI number that will be released from the US. We expect the USD/INR (Spot) to trade with positive bias and quote in the range of 74.20 and 74.80, Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services, said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.11 per cent to 93.16.

“Indian rupee settled flat on the back of the lacklustre movement, taking cues from other Asian currencies. Spot USD/INR is expected to trade in the range of 74.10 to 74.60,” said Dilip Parmar, Research Analyst, HDFC Securities.

On the overseas front, the softness seen in the Euro has helped to lift the greenback towards the 4-month highs printed in late July, heads for fourth straight gains against a basket of peers, Parmar added.

Looking ahead, the eagerly-anticipated US CPI report highlights Wednesday’s calendar, which is otherwise quiet, he further noted.

“The rupee continued to languish in a narrow range as positive cues from strong US Dollar Index was offset by FPI flows in the primary market and soft oil prices. Spot rupee closed flat near 74.44 levels,” said Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd.

Banerjee further said that “Tonight, the focus will be on US CPI inflation data. A softer print can exert downward pressure on USD/INR on Thursday”.

However, the RBI remains an aggressive buyer, and hence USD/INR will remain supported at lower levels. “We are looking for USD/INR to trade within a range of 74.25 to 74.65 levels on the spot,” Banerjee said.

Brent crude futures, the global oil benchmark, rose 0.30 per cent to USD 70.84 per barrel.

Foreign institutional investors were net sellers in the capital market on Tuesday as they offloaded shares worth INR 178.51 crore, as per exchange data.