Rupee drops 15 paise to 78.13 against US dollar

Snapping its three-day rising streak, the rupee declined 15 paise to close at 78.13 against the US dollar on Tuesday as persistent foreign fund outflows and a jump in crude oil prices weighed on investor sentiment.

At the interbank foreign exchange market, the local currency opened at 78.00 and traded in a narrow range. It finally ended at 78.13, down 15 paise over its previous close of 77.98.

"This was another quiet day for the rupee even after strong intermarket cues. Global equities are up while the dollar is down against major trading currencies," said Dilip Parmar, Research Analyst, HDFC Securities.

Parmar further said higher crude oil prices and yields weighed on the domestic currency.

"The USD-INR has been in the range of 77.95 to 78.10 after touching an all-time high of 78.28 on June 13.

"Near-term bias for USD-INR remains range-bound within 77.70 to 78.30. Swing traders can use a lower range for long and cover at the upper range," Parmar said.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.68 percent to 103.99.

Brent crude futures, the global oil benchmark, advanced 1.68 percent to USD 116.05 per barrel.

On the domestic equity market front, the BSE Sensex ended 934.23 points or 1.81 percent up at 52,532.07, while the broader NSE Nifty jumped 288.65 points or 1.88 percent to 15,638.80.

Foreign institutional investors remained net sellers in the capital market on Tuesday as they offloaded shares worth Rs 2,701.21 crore, as per stock exchange data.

"Dollar retraced from higher levels ahead of Fed Chairman testimony that is scheduled tomorrow," said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

Somaiya added that the rupee is expected to trade sideways and quote in the range of 77.70 and 78.40.