Rupee Vs Dollar: Domestic currency falls 2 paise to 83.98 against US dollar

Currency Market Update: Rupee depreciated 2 paise to close at 83.98 against the US dollar on Thursday amid sustained foreign fund outflows and elevated crude oil prices. However, a marginal decline in the value of the greenback against overseas currencies, and rise in the domestic equity market supported the local unit and prevented further slide in the domestic unit, forex traders said.

At the interbank foreign exchange, the rupee opened at 83.95, registering a marginal rise of 1 paisa against the US dollar, and traded in a tight range of 83.95-83.98. It settled at 83.98 (provisional), 2 paise lower than Wednesday's close of 83.96.

"The rupee traded in a range-bound manner... A firm tone in the domestic markets supported the rupee. However... Recovery in crude oil prices capped sharp gains," Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said.

"We expect the rupee to trade with a negative bias on selling pressure from FIIs and geopolitical uncertainty amid the ongoing tensions in the Middle East. A strong US dollar may further pressurise the rupee. However, positive domestic markets may support the rupee at lower levels," he said, adding that rupee spot price is expected to trade in a range of 83.80-84.20.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was down 0.08 per cent to 102.84 points.

Brent crude, the international benchmark, gained 2.45 per cent to USD 78.46 per barrel in futures trade.

"The rupee's movement has been gradual and steady, supported by the RBI's comments on its resilience and limited speculative positioning. The range for the rupee is expected to stay between 83.75 and 84.10, with the sideways trend likely to continue," Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.

In the domestic equity market, the 30-share BSE Sensex rose 144.31 points or 0.18 per cent to close at 81,611.41 points, while the Nifty was up 16.50 points or 0.07 per cent to 24,998.45 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Thursday, as they offloaded shares worth Rs 4,926.61 crore, according to exchange data.