Currency update: Rupee snaps 6-day gaining streak; slips 1 paisa to 83.55 against US dollar

The rupee pared its early gains to close lower by 1 paisa at 83.53 (provisional) against the US currency on Monday, snapping its six-day gaining streak due to a strengthening dollar in overseas markets and an uptick in crude oil prices.

A decline in India's Services PMI also affected the investor sentiment while gains in domestic equity markets capped losses in the local unit, forex traders said.

Earlier in the day, the rupee opened at 83.44 against the greenback, 8 paise higher than its previous close. However, it gave up gains during the day to finally settle at 83.53 (provisional) against the US dollar, 1 paisa lower than its previous close.

The rupee had closed at 83.52 on Friday.

"We expect the rupee to trade with a slight positive bias on positive global equities and fresh FII inflows. However, a recovery in the greenback and elevated crude oil prices may cap sharp upside," Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said.

A decline in India's Services PMI to 58.9 in August from 60.9 in July also contributed to the drop in the rupee, he said.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was up 0.34 per cent at 101.06.

In the domestic equity markets, Sensex jumped 384.30 points to settle at an all-time high of 84,928.61 while Nifty climbed 148.10 points to a record peak of 25,939.05.

Brent crude, the international benchmark, advanced 0.26 per cent to USD 74.68 per barrel in futures trade.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday, as they purchased shares worth Rs 14,064.05 crore, according to exchange data.

"Investors may watch out for US GDP, consumer confidence and core PCE price index data from US this week. We expect USDINR to trade in the range of 83.35-83.75," Choudhary added.