Rupee declines by 6 paise to close at 83.50 against US dollar

The rupee depreciated 6 paise to settle at 83.50 (provisional) against the US dollar on Tuesday, weighed down by a strong greenback in the overseas market and elevated global crude oil prices.

Besides, a muted trend in domestic equities and foreign fund outflows dented investor sentiments, forex traders said.

At the interbank foreign exchange market, the local unit opened at 83.51 and hit the intraday high of 83.47 and a low of 83.56 against the American currency during the session.It finally settled at 83.50 (provisional) against the dollar, 6 paise lower than its previous close.

On Monday, the rupee depreciated 10 paise to settle at 83.44 against the US dollar.

"We expect the rupee to trade with a slight negative bias as the strength in the US Dollar and surge in crude oil prices may keep the rupee under downside pressure," said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

Choudhary further said the overall positive trend in the domestic markets and expectations of fresh foreign inflows may support the rupee at lower levels. Traders may take cues from Fed Chair Jerome Powell's speech and JOLTS job openings data from the US.

"USD/INR spot price is expected to trade in a range of Rs 83.20 to Rs 83.75," Choudhary said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.09 per cent higher at 105.99.

Brent crude futures, the global oil benchmark, were trading 0.76 per cent higher at USD 87.26 per barrel.

In the domestic equity market, the 30-share BSE Sensex fell 34.74 points, or 0.04 per cent, to close at a new peak of 79,441.45 points. The broader NSE Nifty settled 18.10 points, or 0.07 per cent, lower at 24,123.85 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday, as they offloaded shares worth Rs 426.03 crore, according to exchange data.