Rupee falls 2 paise to close at 83.56 against US dollar

The rupee consolidated in a narrow range and settled 2 paise lower at 83.56 (provisional) against US dollar on Friday, as positive domestic markets and a decline in crude oil prices supported the rupee, while strong US Dollar and FII outflows capped sharp gains.

Forex traders said rupee was seen resilient against the dollar, on hawkish Federal Open Market Committee (FOMC) meeting and commentary by the Fed Chair.

At the interbank foreign exchange, the local unit opened at 83.54 and finally settled for the day lower by 2 paise at 83.56 (provisional) against the American currency.

On Thursday, the rupee settled for the day lower by 6 paise at 83.54 against the US dollar.

"We expect the rupee to trade with a slight negative bias on the strong US Dollar and weak global markets. However, a positive tone in the domestic markets and expectations of fresh foreign inflows may support the rupee at lower levels," Anuj Choudhary -- Research Analyst at Sharekhan by BNP Paribas -- said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 105.61, higher by 0.40 per cent.

Brent crude futures, the global oil benchmark, declined 0.12 per cent to USD 82.65 per barrel.

On the domestic macroeconomic front, India's merchandise exports in May 2024 rose 9 per cent to USD 38.13 billion, and imports too increased 7.7 per cent to USD 61.91 billion, from USD 57.48 billion in May 2023, according to government data released on Friday.

Trade deficit, or the gap between imports and exports, during the month under review stood at USD 23.78 billion.

Meanwhile, the wholesale inflation rose for the third consecutive month in May at 2.61 per cent on account of rise in prices of food articles, especially vegetables, and manufactured items.

On the domestic equity market, the 30-share BSE Sensex rose 181.87 points, or 0.24 per cent, to close at a new peak of 76,992.77 points.

The broader NSE Nifty settled 66.70 points, or 0.29 per cent, higher to close at all-time high of 23,465.60 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Thursday, as they offloaded shares worth Rs 3,033.00 crore, according to exchange data.

Meanwhile, Moody's Ratings on Thursday said India will remain the Asia-Pacific region's fastest-growing economy in 2024, sustaining last year's domestically-driven momentum.